Conflict with Hamas estimated to cost Israel $53 billion: central bank

The current conflict with Hamas will cost Israel about 197 billion shekels (around 53 billion U.S. dollars), according to a forecast issued by the country's central bank on November 27.

The sum comprises roughly 107 billion shekels of defense expenditures, 22 billion shekels of damage compensation, and 25 billion shekels of other civilian expenditures, Xinhua reports.

Additionally, interest on government debt is expected to reach 8 billion shekels, while loss of tax revenue due to the conflict is estimated at 35 billion shekels.

The forecast was formulated under the premise that the conflict's direct impact on the Israeli economy would persist into 2024 with decreasing intensity.

According to the forecast, Israel's GDP is expected to grow by 2 percent in 2023 and 2024, lower than the growth assessments of 2.3 percent for 2023 and 2.8 percent for 2024 in last month's forecast.

Due to the expected high expenses and the sharp decrease in tax collection, the bank projected that the government's debt would rise from 60.5 percent of GDP in 2022 to 63 percent in 2023 and further to 66 percent by the end of 2024.