Israel's economy suffers $57B loss from two years of Gaza genocide

Report points to shifting trade patterns and falling exports to some EU countries. (Photo/AP)

The Israeli economy has experienced significant disruption, with cumulative losses estimated at 177 billion shekels, or approximately $57 billion, over the period from 2023 to 2025. This figure, derived from the 2025 Bank of Israel report, highlights the profound fiscal implications of the military engagements in Gaza and the invasion of Lebanon. The economic downturn represents 8.6 percent of the nation's annual gross domestic product, underscoring the severity of the strain placed on public and private sector resources. Beyond direct costs, the report identifies structural economic shifts, including changes in trade relations with European Union nations and a recent reallocation of budgetary resources to sustain ongoing military efforts. As of March 2026, the government has approved a significant budget increase, further complicating the fiscal outlook. With additional conflicts emerging, such as the current military situation with Iran, the long-term sustainability of Israel's wartime economy remains a central concern for financial analysts and policymakers.

The cumulative economic loss between 2023 and 2025 reached $57 billion, accounting for 8.6 percent of annual GDP.
Export volumes to eight European Union nations declined significantly, with losses of $1 billion in 2024 and $1.5 billion in 2025.
A revised 2026 state budget was approved, incorporating an additional $13 billion to fund ongoing military operations.
The 12-day conflict with Iran in June 2025 resulted in a 0.3 percent contraction in annual economic output.
The figures cited exclude the impacts of the conflict with Iran that began in March 2026, which is now entering its fourth week.
The military campaign has resulted in extensive infrastructural degradation, creating immense long-term economic liabilities.

Israel's economy has suffered losses exceeding $57 billion during the two years of genocide in Gaza, according to a report cited by Bloomberg.

Data published in the 2025 annual report of the Bank of Israel showed losses of 177 billion shekels, equivalent to about $57 billion or 8.6 percent of annual gross domestic product, between 2023 and 2025.

The losses were largely attributed to the genocide in Gaza and included costs linked to Israeli invasion in Lebanon.

The report did not include the economic impact of the ongoing war on Iran, which has entered its fourth week, with Israel carrying out air attacks and facing retaliatory ones.

Earlier this month, the Israeli war Cabinet approved a revised 2026 state budget, adding $13 billion to finance its war.

The report also highlighted shifts in trade patterns, with exports to eight European Union countries considered more critical of Israel falling by $1 billion in 2024 and $1.5 billion in 2025, while trade with some other countries increased.

"This pattern may indicate that political positions are influencing export volumes to these countries," the Bank of Israel said.

It added that the 12-day war with Iran last June alone reduced economic output by 0.3 percent of GDP.

Israel launched its genocide on Gaza in October 2023, killing more than 72,000 Palestinians, wounding around 172,000 others and devastating about 90 percent of civilian infrastructure.

___

Source: TRT