War on Gaza cost Israel over $67 billion, as experts warn of economic collapse

The war on Gaza has already cost Israel $67 billion and is expected to rise putting the country on course for economic collapse, an Israeli bank chief told Israeli media.

Rakefet Russak Aminach, the former chief executive officer of Bank Leumi, highlighted the potential economic damage the war on Gaza could unleash on Israel, as Prime Minister Benjamin Netanyahu insists the offensive against Hamas will continue.

The comments come as ceasefire talks in Doha are extended by another day, with Hamas angered by Israel making additional demands for a truce.

"So far, the war has already cost the Israeli economy more than 250 billion shekels, and the defense establishment wants an annual increase of no less than 20 billion shekels," she said in an interview with the Israeli Channel 12.

"The deficit is much larger, we have people who have been evacuated and wounded, and many economic needs that have not even been calculated in the cost of war."

Other financial experts also weighed in on the topic, highlighting their concerns about the state of Israel's finances.

"The most important and urgent task is to deal with the deficit… 2023 began with no deficit, and since then, the situation has deteriorated. At the end of last July, the deficit was 8.1 percent…it must be covered," Yaakov Frenkel, the former governor of the Bank of Israel, said.

Gil Shwed, the co-founder of Check Point, a cyber security software company, said Israel may struggle to rehabilitate its economy amid the ongoing war with foreign investors shying away from the country.

"In the high-tech sector, we are seeing signs of a decline in foreign investment. Naturally, foreign investors are afraid to invest in a country that’s not in a stable state," he said.

According to Frenkel, "the Israeli government has lost credibility with investors", which he believes is one reason behind a drop in foreign investment.

A former Israeli general, Yitzhak Brick, told the Hebrew-language newspaper Maariv that the spending on the war is "causing the destruction of the Israeli economy".

"Every day we hear about another company that has decided to lower Israel’s credit rating, which leads to an increase in the cost of loans that Israel borrows to finance the enormous cost of war," he said.

Last month, Maariv reported that around 46,000 businesses in Israel have closed since October, warning that Israel's economy was in "collapse".

The report added that there has been "almost no foreign tourism" since the war on Gaza began ten months ago, and that "almost no sector has been spared".

Some of the industries hardest hit by the war are the furniture, fashion, houseware items, entertainment, and transport sectors.

The CEO of an Israeli credit risk management firm, under the name CofaceBdi, told the paper that multiple sectors are being impacted by the conflict.

"[Around] 77 percent of the businesses that have been closed since the beginning of the war, which make up about 35,000 businesses, are small businesses, with up to five employees, and are the most vulnerable in the economy," Yoel Amir said.

Israel’s war on Gaza has killed over 40,000 Palestinians and wounded over 92,000 others. Most of the dead are women and children, with civil defence crews estimating that around 10,000 remain trapped under the rubble.