( Middle East Monitor ) – The financial impact of Israel’s ongoing conflict with Gaza had reached an estimated 67.57 billion USD by the end of 2024, according to a report cited by Anadolu Agency.
The total includes direct military expenditures, civilian costs, and losses in revenue, though it does not fully account for all the economic consequences. The Bank of Israel carried out the projections, which were published by the Israeli business newspaper Calcalist.
The article characterized the financial burden as substantial, speaking of the “failure” of the war effort, which underscored the need for significant increases in Israel’s defense budget over the next ten years. It also highlighted that the discussion of the war’s financial impact and outcomes is taking place against the backdrop of talks about the parliamentarian security and defense budget review committee, known in Israel as the “Nagel Committee,” after its chair, Yaakov Nagel.
Calcalist indicated that this future budget would involve purchasing more aircraft, helicopters, armored personnel carriers, large quantities of weapons and ammunition, in addition to investing in personnel or the Israeli soldier himself.
“Dollar Tank,” Digital, Dream / Dreamland v3, 2024
Since the October 7, 2023, Hamas cross-border assault, the Israeli military has killed over 46,000 individuals, the majority of whom were women and children in Gaza. The offensive has devastated the region, and widespread famine is now a looming threat.
This fiscal pressure has ignited debates within Israel, particularly regarding the redirection of funds from natural gas reserves in the Mediterranean, which were initially designated for sectors like healthcare and education, but are now likely to be diverted to defense spending.
On January 7, 2025, the Jerusalem Post quoted a report from the Nagel committee suggesting an increase in the defense budget of up to $4.1 billion over the next five years. The Israeli newspaper clarified that this increase is intended “to ensure that the Israeli Defense Forces are equipped to handle regional challenges and threats.”
The report also recommended strengthening the multi-layered air defense systems, including the Iron Dome, David’s Sling, Arrow systems, and the newly operational laser defense system.
In terms of border security, the Nagel report suggested constructing a fortified security barrier along the Jordan Valley, which would represent a major shift in Israel’s defense strategy, despite potential diplomatic repercussions with Jordan.
On January 6, 2025, the office of the Israeli Prime Minister stated that Benjamin Netanyahu, along with Defense Minister Yoav Gallant and Finance Minister Bezalel Smotrich, had received the recommendations from the “Nagel Committee.”
This work by Middle East Monitor is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. The article has been reorganized and rephrased, with information added from Al Jazeera and SamaNews..
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