Iran war to cost Israel $3 billion weekly, its Finance Ministry warns

Israel’s ongoing war with Iran could cost the country about New Israel Shekel 9.4 billion (around $3 billion) per week under current nationwide restrictions on economic activity, the Israeli Finance Ministry has warned.

The warning came in a letter sent by Finance Ministry Director General Ilan Rom to Maj. Gen. Shai Klapper, head of the Israel Defence Forces’ (IDF) Home Front Command, urging authorities to ease some restrictions to allow a gradual reopening of parts of the economy.

“There is no dispute about the need to preserve a defence policy adapted to the security situation, but at the same time, shutting down the economy on a broad scale carries heavy economic costs,” Rom said in the letter, according to a report by The Times of Israel.

Rom added that authorities needed a balanced approach that addresses both security needs and economic stability.

“We need a solution that addresses both the security needs of the Home Front and the needs of the economy, after two and a half years in which the economy has been paying a heavy economic price in light of the increase in security needs and the repercussions of the war,” he said.

Economic restrictions amid wartime measures

Shortly after Israel and the United States launched joint strikes on Iran on Saturday, the IDF’s Home Front Command issued nationwide emergency guidelines aimed at protecting civilians.

The measures banned public gatherings, suspended educational activities and halted most workplace operations, except for essential services.

Authorities also limited travel to workplaces, encouraged remote working arrangements and ordered schools and other educational institutions to remain closed.

On Monday, following a fresh assessment of the security situation, the Home Front Command extended the restrictions across the country until Saturday night.

According to the Finance Ministry, the restrictions — combined with the closure of schools, workplace shutdowns and the mobilisation of reserve soldiers — are expected to cause weekly economic losses of about NIS 9.4 billion.

Proposal to ease restrictions

Rom has urged the military authorities to move from the current “red level” alert, which allows only essential activity, to the “orange level”, which permits limited economic operations under certain safety conditions.

Under the proposed orange alert level, businesses and workplaces could operate if they are located near protected spaces such as shelters, while educational institutions would remain closed.

The Finance Ministry estimates that under the limited activity framework, weekly economic losses would drop to around NIS 4.5 billion (about USD 1.5 billion) — less than half the losses under the current restrictions.

“This policy will enable the expansion of economic activity while maintaining Home Front security, in a manner that meets both economic and security needs,” Rom said.