The costs of Israel’s wars have caused significant financial strain on the country’s education and healthcare sectors.
According to the Governor of the Bank of Israel, Amir Yaron, the total cost of the series of regional conflicts that began after Hamas’s attack on Israel on October 7, 2023, had reached $138 billion by the end of April.
“That is a very large amount, more than 17 percent of GDP,” Yaron said at an economic conference held recently in Herzliya, north of Tel Aviv.
Israel’s Finance Ministry initially estimated that military operations launched jointly by the United States and Israel against Iran, beginning on February 28 and continuing until efforts to halt the conflict started on April 8, would add another $12 billion in expenses.
When approving the 2026 budget in late March, the Israeli government noted that the Defense Ministry’s budget had more than doubled compared with its level before October 2023.
To finance the war effort, the government borrowed heavily from international markets throughout 2024 and 2025. Economic estimates indicate that public debt, which stood at around 60 percent of GDP before the war, has now risen to more than 69 percent of GDP.
Taxes and social security contributions have also increased.
Esteban Klor, an economics professor at the Hebrew University of Jerusalem, said Israel is effectively “paying double” for the war.
He explained that the first cost comes from rising debt. In addition, broad budget cuts have reduced government social spending and limited investment in public services.
“Education will suffer, infrastructure quality will decline, and the performance of the healthcare system will also deteriorate,” Klor said.
