Israel Faces Soaring War Costs as “Roar of the Lion” Campaign Exceeds NIS 65 Billion

The total military and civilian cost of Israel’s “Roar of the Lion” war against Iran and Hezbollah is expected to reach at least 65 billion shekels, according to initial estimates, highlighting the growing economic burden of a prolonged, multi-front conflict. The figure does not include broader macroeconomic damage such as slowed growth, rising inflation, reduced investment, and delays in major infrastructure projects.

Defense expenditures account for the bulk of the total, exceeding 50 billion shekels. Direct civilian costs are estimated at approximately 10 billion shekels, with additional damages from missile strikes across more than 1,000 impact sites still being assessed.

Indirect losses—particularly from business disruptions and prolonged closures—are expected to increase the overall economic toll significantly.

By comparison, the shorter “Am Kalavi” operation in June last year, which lasted 12 days, cost approximately 22 billion shekels, with the final cost projected to reach 25 billion shekels.

Daily Combat Costs Reach Up to NIS 1 Billion

According to calculations by the Office of the Financial Advisor to the Chief of Staff, the average daily cost of the current war has reached around 1 billion shekels.

During the first two weeks—marked by intensive strikes in Iran and widespread missile defense operations—the daily cost peaked at approximately 1.8 billion shekels. It later declined to around 800 million shekels per day before rising again בעקבות expanded ground operations in Lebanon.

These costs include large-scale reserve mobilization, ammunition use, equipment wear and damage, medical treatment for casualties, and additional classified expenditures, including advanced weapons systems.

Additional Burden from Ongoing Gaza Operations

At the same time, Israeli forces continue to maintain a significant presence in Gaza, controlling approximately 52% of the territory since the ceasefire in October 2025. This ongoing deployment adds tens of millions of shekels in daily costs, further straining the defense budget.

A high-level government discussion is expected after the Passover holiday, involving Prime Minister Benjamin Netanyahu and senior ministers, to determine the scale of additional funding required for the defense establishment.

The military is reportedly requesting at least 15 billion shekels in supplementary funding, including 7 billion shekels needed to address gaps in compensation and rehabilitation programs for casualties and bereaved families since October 2023.

Financing such an increase may require raising the state budget deficit from 4.9% to 5.6%, implementing across-the-board cuts of 2%–3% in government spending, or a combination of both.

Major national projects—including the metro system, new government buildings in Jerusalem, and transportation infrastructure—are expected to face delays as a result. Any budget changes will require government approval and passage through the Knesset, which is currently in recess.

Civilian Compensation and Damage Claims Mount

Civilian-related costs, estimated at around 10 billion shekels, include:

• Approximately 2 billion shekels for direct property damage
• About 7.5 billion shekels in broader compensation programs, including business support
• Additional allocations for local authorities, agriculture, and emergency services

So far, around 25,000 claims have been filed with the national compensation fund, including:

• 16,000 claims for structural damage
• 2,300 for contents and equipment
• 5,500 for vehicle damage

The highest number of claims were reported in Tel Aviv, Beersheba, Arad, Dimona, Beit Shemesh, and Petah Tikva.

Broader Economic Impact Deepens

Data from the Bank of Israel indicate that the total cost of the war since October 2023 had already reached 352 billion shekels by the end of February. The current campaign is expected to further weigh on the economy, including:

• A projected reduction of at least 1.5% in economic growth
• A sharp decline in consumption, estimated at around 40% during the الحرب period
• Significant disruption to sectors such as tourism, culture, and retail

The Ministry of Finance and National Insurance Institute said most unemployment-related compensation—covering up to 70% of wages for eligible workers—will be paid beginning April 12. These payments primarily cover absences in March.

Legislation passed during the conflict allows the government to quickly reinstate compensation mechanisms in future emergencies without requiring new laws, valid through the end of 2027.

At the same time, public sector employees received full salaries for March despite widespread work absences, a move that has drawn criticism from business groups facing significant financial losses.

A Growing Economic Challenge

As the conflict continues, the financial burden is emerging as a central challenge alongside the military campaign. With costs rising and economic activity under pressure, policymakers face difficult decisions on funding, priorities, and long-term recovery.