Israel's Central Bank Reports $57 Billion Economic Losses from Gaza and Lebanon Wars

Israel's central bank reported in its 2025 annual report, published on March 24, 2026, that the country's economy suffered $57 billion in losses, equivalent to 8.6% of gross domestic product, due to nearly two years of military conflicts in Gaza and operations linked to Lebanon.

The report excludes the economic impact of the ongoing conflict with Iran, now in its fourth week. It warns that reduced economic growth and rising budget deficits could lead to increased debt levels.

The Gaza war, which began on October 7, 2023, has resulted in more than 72,000 Palestinian deaths. Hurriyat reported that most of those killed were women and children. Khaama Press added that around 172,000 Palestinians were injured and nearly 90% of Gaza's civilian infrastructure was destroyed.

Prolonged conflicts have strained Israel's economy through higher defense spending, reduced foreign investment and disruptions in key sectors including tourism, technology and exports, according to Khaama Press. The outlet also reported shifts in trade patterns, with Israeli exports declining to several European Union countries critical of Israel while increasing with others.

Israel's war cabinet approved an additional $13 billion in spending for the 2026 budget to cover rising military costs, Khaama Press said.