Attacks on Gaza may cost Israel billions of dollars

BRUSSELS

Israel’s attacks on Gaza are expected to cost billions of dollars to the Israeli economy, according to studies on the financial aspect of the conflict.

Persistent attacks and the bombardment of Palestinians has become increasingly costly day by day, therefore, the rise of the conflict’s negative effect on the Israeli economy escalates, causing heightened uncertainties and weakening the country’s finances.

Israel spends close to $300 million in direct expenditures per day due to the attacks since Oct. 7, according to the studies.

The attacks have been estimated to have cost $60 billion to the defense budget in the past four months, considering the various economic effects and loss of revenue.

Israel’s attacks have already resulted in a decline in tax revenues, increased debt, economic recession and a sharp drop in the gross domestic product is expected.

The losses caused by the attacks will have direct effects, such as massive disinvestment, disruption of the labor market and slowing productivity growth.

The attacks have caused the complete halt of tourism in Israel, issues in global maritime, a decline in agricultural production and a sharp decline in high-tech investments.

The tourism sector is expected to suffer long-term, as the country will not be able to maintain a favorable environment for visits, resulting in high revenue losses, unemployment and a tainted image of Israel as a tourist destination, which in turn would weaken the chance of an economic recovery.

The conflict also caused Israel its investor interest, as difficulties in attracting investment are certain to make it harder for businesses to grow and create new jobs.

Israel may lose approximately $400 billion in economic activity in the next 10 years due to the conflict, in addition, 90% of the damage to Israel will come from indirect effects, such as reduced investment, deteriorating labor market, loss of productivity and economic decline, according to the “Costs of the Israeli-Palestinian Conflict” study previously prepared by the US-based think-tank RAND Corporation.

*Writing by Emir Yildirim in Istanbul