How much money will Israel lose because of the conflict with Hamas in 2023?

The Israeli Finance Ministry said on January 11 that the government spent a total of 24.7 billion Shekels (about 6.59 billion USD) on the conflict with Hamas in 2023.

The conflict in the Gaza Strip has cost Israel millions of dollars every day. (Source: AP)

According to the Israeli Finance Ministry, the huge costs incurred between October 7, when the Israel-Hamas conflict broke out, and December 31, 2023, with 17 billion shekels (about $6.6 billion) spent on defense and the rest on civilian purposes related to this conflict.

In December 2023 alone, conflict spending amounted to 17.2 billion Shekels out of a total monthly government spending of 71 billion Shekels, up 82.7% year-on-year, bringing the Israeli government's annual deficit to 77.5 billion Shekels in 2023.

The Israeli Ministry of Finance explained that in addition to the aforementioned increase in spending, the conflict also reduced revenue, with tax losses due to reduced activities in Israel. Accordingly, the Israeli government's revenue in 2023 will decrease by 6.4%, while expenses will increase by 12.5% compared to 2022.

According to Reuters news agency, speaking on the Israeli army's Army Radio in late 2023, Israeli Finance Minister Bezalel Smotrich estimated that the war in the Gaza Strip was costing Israel "directly" about 1 billion shekels ($246 million) per day.

However, Minister Smotrich said he had not yet assessed the “indirect costs” to the Israeli economy, which has been crippled in part by the massive call-up of reservists and rocket attacks by the Islamist Hamas movement.

Hamas launched Operation Al-Aqsa Flood, carrying out its largest attack in years against Israel starting on October 7, 2023. In response, the Israeli military launched Operation Iron Sword, with airstrikes on a series of targets in the Gaza Strip.

International credit rating agency S&P Global Ratings said on October 24, 2023 that it had downgraded Israel's outlook from "stable" to "negative", citing the possibility that the Israel-Hamas conflict could spread and have a more pronounced impact on the Israeli economy.

However, at that time, Minister Smotrich described S&P Global Ratings' adjustment as "sowing fear".

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