Arabic version: إسرائيل تواجه ضغوطًا اقتصادية بسبب الصراع المستمر مع إيران
According to Al Jazeera,
Two and a half years of launching brutal attacks on its neighbours and the besieged enclave of Gaza have transformed Israel’s politics, economy and society, analysts say. Now, as Israel engages in what many within the country have been repeatedly told is an “existential battle” with regional nemesis Iran, what the future might hold for Israel remains to be seen. The conflict’s ultimate end will likely be determined by lawmakers in Washington rather than planners in Israel.
According to the Bank of Israel’s own numbers, the nation’s wars on Gaza, the Houthis, Lebanon and Iran since October 2023 have already cost it 352 billion shekels ($112bn), equating roughly to an average cost of 300 million shekels ($96m) per day. At the International Court of Justice, Israel faces what jurists have already ruled are credible accusations of genocide, while both its prime minister and former minister of defence are the subject of arrest warrants for war crimes issued by the International Criminal Court in November 2024. Now, economically, the country is bracing for what could be the catastrophic financial consequences of its war on Iran.
And it seems no definite end is in sight. Israel’s stated war aims of degrading Iran’s military capabilities and creating the conditions whereby its public might rise up against the government seem somewhat distant. After four weeks of constant bombardment, there are no strong signs of public disquiet in Iran or challenges to the government. Despite United States officials’ public claims to have essentially defanged Iran militarily, Reuters reported on March 27 that only one-third of Tehran’s missile stock had been destroyed, citing five sources within US intelligence.
In the meantime, Israel’s public faces irregular but frequent air raid warnings, signalling yet another retreat to the shelters and shattering any semblance of normality each time. There is a paradox at play. At home, emergency measures which have seen many schools closed while parents are expected to continue working have increased strain on families. But analysts within Israel say these same families still regard the war they are experiencing as always having been inevitable. “There’s a graveness that’s fallen over people, a sort of a pall,” political consultant and pollster Dahlia Scheindlin told Al Jazeera from a location near Tel Aviv. She described something close to a grim public determination among Jewish Israelis to press on with the war for the time being, however. People are exhausted, but for now, 78 percent of Jewish Israelis told the Israel Democracy Institute in late March that they supported continuing the war. Significantly, however, a majority also thought that planners in the US and Israel had underestimated Tehran’s abilities.
How long they will continue to support the conflict, therefore, Scheindlin can’t say. “It’s not like the 12-day war [between Israel and Iran in June 2025] because this has gone on for so much longer. And it’s not like rocket fire from Hamas in the past. “Iran fires ballistic missiles, meaning that everyone needs to shelter each time. It’s also gone on for much longer, and how long it will continue, we don’t know,” she said. “To be honest, I don’t know how we’ll emerge from this. No one does. We’re still in the middle of it all.”
The backdrop to all this is a politics which few would recognise from that which ratified the Oslo Accords in the 1990s. Or that which in the 1980s expelled the ultranationalist Meir Kahane, the proponent of extremist beliefs that hardline National Security Minister Itamar Ben-Gvir and many of his Jewish Power party’s current members implicitly support. Indeed, figures such as Ben-Gvir and ultra-Orthodox Finance Minister Bezalel Smotrich – a settler whose movement believes it is biblically entitled to the land of the West Bank – now play central roles in government with both cross-party and public support. Then there were the celebrations that greeted the passage of Ben-Gvir’s death penalty law, designed specifically to target Palestinians. Topping it off this week was the passing of a record $271bn budget – voted on by lawmakers from a fortified bunker – which diverted millions of shekels to the country’s ultra-Orthodox and hardline settler groups in what analysts and opposition groups say was a bid to shore up support for Netanyahu’s government in the face of continued military action.
As Israel grapples with the ramifications of its prolonged conflicts, analysts warn of the potential long-term economic consequences. Increased military spending, coupled with reduced consumer activity and lost productivity, may strain the nation’s resources. The situation remains precarious, with the public’s support for the war being tested as financial pressures mount.
