The weekly cost of the Israel-Iran war is approaching 2% of Israel's GDP: massive spending on missile defense is putting significant pressure on Israeli public finances.

Israel's offensive against Iran has a significant economic impact, with an estimated cost of approximately 20 billion shekels per week, which represents almost 2% of the country's GDP. Direct military expenses, damages caused by Iranian attacks, and the paralysis of economic activity contribute to this situation. The intensive use of missile defense systems adds to the costs, with prices ranging from $150,000 for missiles in the Iron Dome system to $3 million for Arrow interceptors.

Economist Esteban Klor emphasizes that, in the context of other confrontations, such as the one with Hezbollah, defense spending will increase, and the public deficit could exceed 5% of GDP. Public debt, which was about 60% of GDP before the conflict, could rise to over 70% due to military spending. Klor suggests the need for economic reforms to stimulate growth and expand labor market participation, especially in the ultra-Orthodox community. Although the rising oil prices due to regional tensions could affect the economy, the direct impact of the war remains the main challenge, and Israeli authorities do not seem to have the intention to end the conflict anytime soon.