Iran war cost Israel around $11.5 billion, initial Finance Ministry estimate finds

The war with Iran has cost Israel about NIS 35 billion ($11.5 billion) in budgetary expenses, according to an initial estimate by the Finance Ministry.

The Finance Ministry says that the US-Israel war with Iran incurred high economic costs, including a loss of GDP and an increase in state spending, some of which will only become fully clear in the future.

The bulk of the cost comprises an estimated NIS 22 billion in defense and military spending for the IDF, Defense Ministry, National Security Ministry, and other security organizations. This amount has already been added to the Defense Ministry budget as part of the state budget for 2026, the Finance Ministry says.

The total cost of the government’s compensation plans for direct missile damage, loss of economic output for businesses, and unpaid leave for employees is estimated at NIS 12 billion.

Another NIS 1 billion is being spent on civilian costs, including hospital operations, emergency response, and expenses for the Social Affairs Ministry.

“The functioning of the Finance Ministry and responsible management of the country’s economy were a critical factor in the great operational success,” says Finance Minister Bezalel Smotrich. “The employees of the Finance Ministry are full partners in the great successes on the front and in our tremendous achievements against Iran.”