Shortly after the Israeli Occupation Forces (IOF) launched the aggression against Gaza, the Israeli Hapoalim Bank estimated that the war could cost Israel at least 27 billion shekels (about $6.8 billion).
Now, about 80 days later, the Israeli Institute for National Security Studies (INSS – though I’m not 100 per cent positive about this - the Arabic translates as the National Security Research Centre) has revealed that the war has so far cost over 200 billion shekels ($55 billion), which amounts to a 10 per cent contraction in the Israeli economy. The $14 billion in aid that the Biden administration wants to send Israel would barely cover a quarter of these costs.
The foregoing does not take into account the financial losses from the interruption in the operations of the port of Eilat due to Houthi attacks against ships bound to or from Israel.
On top of this, the tourist sector alone has incurred a loss of $5.8 billion due to the cessation of most commercial flights. The suspension of production in the Tamar natural gas field is costing another $200 million a month, according to a statement by the US petroleum firm, Chevron.
The technology sector, which contributes about 18 per cent of GDP and produces about half of Israeli exports, has been particularly hard hit because of the call-up of reservists. The labour shortage due to the mobilisation and the expulsion of 150,000 Palestinian workers from their jobs inside Israel has also caused slowdowns and suspensions of operations in the construction, agricultural, industrial and commercial sectors.
The Israeli Central Bank estimates that the Israeli economy is losing about $600 million a week as a result of the absence of thousands of workers from their jobs.
Meanwhile, the Israeli Central Bank’s hard currency reserves fell by $7 billion in October as it scrambled to shore up the shekel. According to the Financial Times, this forced the government to borrow $6 billion at an unfavourable interest rate while according to CNN, citing experts, Israel’s GDP will shrink by 15 per cent.
So will Netanyahu wake up from his sinful hubris before the temple collapses on him?
* A version of this article appears in print in the 7 March, 2024 edition of Al-Ahram Weekly
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