Israel's Economic Struggles Amid Air War with Iran

Israel's economy could face significant losses due to the ongoing air conflict with Iran, with damages potentially reaching 9 billion shekels weekly. The Finance Ministry suggests less restrictive measures to mitigate losses. Ongoing conflict disrupts daily life in Israel and energy exports from the Gulf.

The Israeli economy is bracing for a severe impact as the Finance Ministry estimates weekly losses could reach over 9 billion shekels due to the ongoing air conflict with Iran. Current "red" restrictions include school closures and limited workforce mobility, potentially costing the economy around 9.4 billion shekels weekly.

To alleviate the economic burden, the ministry has recommended transitioning to an "orange" level of restrictions, which allows more workplace activity. This change could reduce economic losses to approximately 4.3 billion shekels a week. The conflict, initiated by Israel and the U.S. bombing of Iran, has led to widespread retaliatory strikes and disrupted vital energy exports from the Gulf.

U.S. and Israeli authorities acknowledge that the military campaign may extend over several weeks. Schools in Israel are closed, and public gatherings are banned, with employees largely working from home. Despite setbacks from previous conflicts with Hamas, Israel's economy grew by 3.1% in 2025, with a projected acceleration in growth following a ceasefire.

(With inputs from agencies.)