WANA (Jul 17) – Israeli media have acknowledged that the recent 12-day war with Iran has severely impacted the country’s economy, effectively dragging it back to the stagnation and financial strain experienced during the COVID-19 pandemic,  when each week of shutdowns caused billions of shekels in economic losses.

 

According to Hebrew-language reports, the war, which took place from June 13 to June 24, 2025, dealt a blow to Israel’s economy on par with the pandemic period.

 

During this time, defense expenses, including airstrikes and extensive use of air defense systems, were estimated at over 8 billion shekels (approximately $2.2 billion). This figure represents only a portion of the total economic damage.

 

Throughout the conflict, more than 450 ballistic missiles and around 100 drones were launched toward Israel. The attacks led to widespread business closures and disruptions in economic activity, especially in the service sector, including restaurants and small industries.

The Second Round of Iranian Missile Strikes on Occupied Territories in Day Three of the Iran-Israel War, June 15, 2025. Social media/ WANA News Agency

35% of Businesses Report Over 50% Revenue Loss

According to official data published in Globes, a leading Israeli financial newspaper, around 35% of Israeli businesses reported a revenue decline of more than 50% during the 12-day war. In specific sectors such as restaurants and food services, up to 70% of businesses were either shut down or experienced major reductions in activity.

 

Additionally, 35% of businesses reported losing over 80% of their workforce, reflecting the severe labor market impact. The scope of the economic disruption is considered comparable to the COVID-19 lockdowns.

 

During the pandemic, each week of economic shutdown caused Israel an average loss of 5.5 billion shekels (approximately $1.5 billion). Economic experts now estimate similar weekly losses as a result of the recent conflict. Due to the ongoing strain and declining growth, the Bank of Israel has revised its 2025 economic growth forecast downward—from 4% to 3.6%—indicating the mounting financial pressure on the government.

 

Foreign Aid Not Enough Amid Widespread Anxiety

Hebrew media noted that while the United States and some Western countries have provided substantial financial support to Israel, these efforts fall short of covering the enormous economic losses and the unprecedented slowdown in business activity.

Image Circulating from Tel Aviv Following Iranian Missile Strike / WANA News Agency

Image Circulating from Tel Aviv Following Iranian Missile Strike. Social media / WANA News Agency

The constant threat of Iranian missiles and a pervasive sense of insecurity have created fear and anxiety among both investors and ordinary citizens, inflicting further, hard-to-quantify damage on the national economy.

 

75% of Workers Considering Emigration

According to new surveys published in Israeli media, more than three-quarters of Israeli workers are considering emigration after the war with Iran—a reflection of the deep social and economic crisis gripping the country. Experts warn that if this trend continues, Israel could face a serious shortage of skilled labor, long-term negative growth, and further instability.

 

In addition to military expenditures, the war has caused significant damage to infrastructure and buildings. The Israeli Compensation Fund has so far allocated nearly 9.5 billion shekels (about $2.7 billion) to assist more than 40,000 affected individuals and businesses. However, given the scale of destruction and the possibility of further conflict, this budget is expected to be depleted quickly.

 

As a result, the government may be forced to raise taxes and cut public services to meet financial demands—moves that could further erode public trust.

 

A War With Broader Consequences Than Previous Conflicts

The 12-day war with Iran not only inflicted direct military costs but also led to wide-ranging economic and social consequences, delivering a more devastating blow to Israel’s economy than previous conflicts. Analysts warn that if the hostilities continue, the country could face even deeper long-term economic and social repercussions.

The Second Round of Iranian Missile Strikes on Occupied Territories in Day Three of the Iran-Israel War, June 15, 2025. Social media/ WANA News Agency