Israel claims ₹2.56 lakh crore loss amid ongoing war with Iran.

Israel Faces Massive Economic Toll Amid Iran War: Estimated Losses Soar

The ongoing conflict between Iran and Israel is proving to have a profound and far-reaching impact. While Europe continues to grapple with energy shortages due to the Russia-Ukraine war, the Middle East is now at the centre of another crisis, with Israel counting heavy economic and human losses from the recent hostilities with Iran.

Damage and Death Toll

Over the past 12 days, Iranian missile and drone strikes have inflicted property damage estimated to be nearly double the total claims from the October 7 attack and the 615 days of conflict since. Nearly 1,000 people have lost their lives, and many others have been injured in the recent flare-up, which followed Israel’s large-scale assault on Iranian nuclear facilities that killed several top generals.

$55.6 Billion War Cost

According to the Bank of Israel, the total cost of war-related damage from 2023 to 2025 could reach a staggering $55.6 billion—roughly 10% of Israel’s economy. This includes not just direct damage, but also wider economic disruptions such as the suspension of Palestinian work permits, which led Israel to hire thousands of workers from India and Sri Lanka to maintain labor flow.

Finance Ministry Estimates: $12 Billion

Israeli Finance Minister Bezalel Smotrich has estimated the current cost of the 12-day war at $12 billion. This figure includes around 5 billion shekels in compensation for affected businesses. During the fighting, schools and most businesses were shut down, except for those deemed essential, effectively bringing the economy to a standstill.

$3 Billion in Infrastructure Damage

The Director General of Israel's Tax Authority revealed that at least $3 billion in damage was caused to infrastructure. This includes destroyed buildings and compensation for residents and local enterprises. Over 9,000 people have reportedly been displaced due to missile attacks. Notably, the $3 billion estimate does not include military expenses such as the replacement of weapons or the use of defense systems.

The ongoing war has left deep economic scars on Israel’s financial stability, raising concerns over long-term recovery and security expenditures in an already volatile region.