Israel’s economy is under increasing strain as it grapples with simultaneous conflicts in Gaza, Lebanon, Yemen, and now direct confrontation with Iran. Defense spending has surged by 65% in 2024, reaching $46.5 billion, with 8.8% of GDP allocated to military expenses. Labor shortages are rising due to mass military deployments and revoked Palestinian work permits. Taxes have also increased to cover growing costs. While key sectors like technology remain stable, signs of stress are emerging. Experts warn that if the conflicts continue, Israel’s economic stability could falter despite current investor confidence.
With the conflict in Gaza ongoing, Israel has now entered into direct confrontation with Iran. What impact will this have on the country's economy? War is expensive. Beyond the human cost and destruction, it requires massive funding—for weapons, logistics, and manpower. Israel is now feeling that burden.
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