Tel Aviv

The war that broke out in Gaza after Palestinian militant group Hamas launched unprecedented attacks against Israel on October 7 will cost Tel Aviv as much as 200 billion shekels ($51 billion), the Calcalist financial newspaper reported citing preliminary finance ministry figures on Sunday (Nov 5).

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The media reports stated that the estimate, which equals up to 10% of gross domestic product, was premised on the war lasting between eight to 12 months; on it being limited to Gaza, without full participation by Lebanon's Hezbollah, Iran or Yemen; and on some 350,000 Israelis drafted as military reservists returning to work soon.

Calcalist stated that the ministry dubbed the 200 billion shekels expenditure as an "optimistic" estimate. However, the ministry claimed that it does not stand by Calcalist's data.

The Israeli Army launched a counter-offensive after Hamas gunmen took the world by surprise on October 7 in one of the deadliest attacks against civilians.

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Loss of revenue

Calcalist said half of the expense would be in defence expenditures that sum up to approximately 1 billion shekels a day. Another 40-60 billion shekels would come from a loss of revenue, 17-20 billion for compensation for businesses and 10-20 billion shekels for rehabilitation.

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Earlier, Finance Minister Bezalel Smotrich said that Israel's government was readying an economic aid package for those affected by Palestinian attacks that will be "bigger and broader" than during the coronavirus pandemic.

On Thursday (Nov 2), Prime Minister Benjamin Netanyahu said the state was committed to helping everyone impacted by the war.

"My directive is clear: Open the taps and channel funds to whoever needs them," he said without giving figures.

"Just like we did during COVID. In the past decade, we have built here a very strong economy and even if the war exacts economic prices from us, as it is doing, we will pay them without hesitation."

(With inputs from agencies)