Victims, injured, hostages, refugees - amid the suffering of people in the Middle East after the terrorist attack by Hamas on October 7, 2023, on the following fact remains in the background: Israel's defense costs the country enormous sums and at the same time seriously weakens the Israeli economy, writes the German public media ZDF.
The Israeli Ministry of Finance estimates the direct costs of the war until August of this year. at 100 billion shekels (26.5 billion US dollars). Back in May, the head of Israel's central bank, Amir Yaron, predicted that by the end of 2025, the cost of the war would reach the sum of 66.3 billion US dollars. But that was before Israel's ground offensive in southern Lebanon and before Iran's major missile attack since early October, ZDF recalls.
Up to $3 million for just one interceptor missile
When Israel is hit with rockets from Lebanon, the Gaza Strip, Yemen or Iran, each interception attempt costs at least $40,000. This is the minimum price of a "Tamir" missile. about the "Iron Dome" air defense system, which Israel uses to protect against short-range missiles, the publication said, citing experts.
If longer-range missiles are used, as in the latest Iranian attack, air defenses with the "David's Sling" and "Arrow" comes out to the country significantly more expensive. According to the Middle East expert from the Bundeswehr University in Munich, Jan Busse, a missile for "Strela 2" comes out 2 million US dollars, and for the older version of the defense system - "Strela 3" - an interceptor missile costs even 3 million dollars.
Over 26,000 rockets fired at Israel since the start of the war
According to data from the Israeli army, more than 26,000 rockets have been fired at Israel since the terrorist attack by Hamas on October 7 last year. "Anti-missile defense is probably one of the biggest costs since the beginning of the war," says Busse in this regard.
It is estimated that the country's air defense alone in the last Iranian attack cost Israel 450 million US dollars, and the attack in April of this year has absorbed at least US$1 billion.
But Israel spends money not only on air defense. The rest of the military equipment is also very expensive. As expert Jan Busse explains to ZDF, a large part of the resources currently being used have been accumulated by Israel over the past few years precisely in preparation for such a crisis situation. In addition, the US significantly increased its military aid to Israel after the Hamas attack. "Over the last 12 months, it's been almost $18 billion, $5 billion of which has gone to missile defense systems," says Busse.
"This paralyzes Israel's economy"
However, the costs of the conflicts with Iran and its allies are a huge burden on the Israeli state budget, says Jan Busse. The mobilization of over 300,000 people who - because they serve in the army - are absent from their workplaces also contributes to this.
"For the State of Israel, this means a double financial burden: on the one hand, the mobilized get paid, and on the other hand, companies are given compensation payments for the absence of their employees,'' Busse explains. According to him, this is paralyzing Israel's economy and leading to a serious loss of productivity.
In its latest forecast, the Central Bank predicts a budget deficit of 7.2% of the country's GDP, and for the next year - just under 5% of GDP. The share of public debt is also growing - from 61.4% in 2023 to 68% by the end of this year.
And while the head of the Central Bank assures that Israel has always demonstrated resilience in difficult times, the conflict in the Middle East puts that resilience to a severe test. And its end is never in sight.