Tel Aviv: Israel's war with Iran is exerting a financial strain on the nation, with costs spiraling to an estimated $200 million each day.
According to Anadolu Agency, this enormous expenditure is quickly emerging as a significant factor influencing the conflict's duration, as it places immense pressure on Israel to seek a swift resolution.
The financial burden is primarily due to the interception of Iranian missiles, a costly endeavor that the report from The Wall Street Journal suggests could reach tens or even hundreds of millions of dollars daily. Israel's missile interception systems, such as David's Sling and Arrow 3, have been frequently deployed to counter more than 400 missiles launched by Iran in recent days. Each interception is a substantial financial undertaking, with costs ranging from $700,000 to $4 million per missile.
Offensive military operations are further inflating expenses. The deployment of Israeli F-35 jets over long distances to strike targets in Iran incurs costs of approximately $10,000 per hour per aircraft, not to mention the expense of precision munitions like JDAMs and MK84s. The Aaron Institute for Economic Policy has estimated that a month-long conflict could escalate Israel's expenditure to $12 billion.
Economist Zvi Eckstein emphasized the unprecedented financial demands of this war compared to previous conflicts with Gaza or Hezbollah, noting that ammunition for both defensive and offensive operations constitutes the primary expense. This economic strain has intensified calls for a shorter conflict, although Prime Minister Benjamin Netanyahu has shown no signs of ending operations prematurely, as he aims to cripple Iran's nuclear and missile capabilities.
Despite the ongoing conflict, Israeli markets have remained stable, with some even experiencing gains. However, the physical damage is accumulating, with reconstruction estimates surpassing $400 million following extensive missile strikes. Engineers report that hundreds of buildings have been damaged, and more than 5,000 civilians have been evacuated. Additionally, Israel's largest oil refinery was temporarily closed due to an attack, and work in several critical infrastructure sectors has been halted.
Former Bank of Israel Governor Karnit Flug highlighted the importance of the conflict's duration for economic sustainability, stating that the situation varies significantly between a week-long conflict and one that persists for two weeks or a month.