Israel Suffers 350 Billion Won Daily Losses Due to War with Hamas

The Israeli government estimated that the war with the Palestinian armed group Hamas would cause an economic loss of $270 million (approximately 350.9 billion KRW) per day.

[Image source=Yonhap News]

On the 22nd (local time), Bloomberg reported that the Israeli Ministry of Finance estimated the damage caused by the war with Hamas at this level.

Israel, which was attacked by Hamas in a surprise attack on the 7th of last month, is seeing a sharp increase in financial expenditures due to the war. In just last month, it recorded a fiscal deficit of 22.9 billion shekels (approximately 8 trillion KRW), and Finance Minister Bezalel Smotrich submitted a revised budget increasing government spending by 35 billion shekels (approximately 12.1936 trillion KRW) for the remainder of this year.

Israeli financial advisory firm Leader Capital Markets analyzed that the war with Hamas will result in fiscal expenditures of 180 billion shekels (approximately 62.3712 trillion KRW) for 2023-2024. Of this, two-thirds are expected to be borne by Israel, with the remainder by the United States.

Moody's Investors Service forecasted that the total borrowing of the Israeli government will nearly double from 5.7% of last year's economic output to about 10% this year.

The Israeli government maintains that it can sufficiently bear the costs of the war. The Ministry of Finance stated that it is operating under the assumption that the war will last several months and is preparing additional measures to mitigate further shocks.

Additionally, through Wall Street financial institutions such as Goldman Sachs Group, Israel is issuing bonds denominated in yen, euros, and dollars, while also raising significant funds within its domestic market. Since the outbreak of the war on the 7th of last month, the Israeli Ministry of Finance has increased the issuance of local bonds to 18.7 billion shekels (approximately 6.5158 trillion KRW). This is a significant increase from the average monthly issuance of 5 billion shekels (approximately 1.7422 trillion KRW) up to September.

Yali Rotenberg, the Ministry of Finance Comptroller, said, "Large institutional investors who are well aware that Israel is at war participated in Israeli government bond auctions," adding, "This is the strong message they are sending."

The value of the Israeli shekel against the dollar has also been moving near its highest point since August.

Bloomberg Economics analyzed that Israel's foreign exchange reserves stand at $191 billion (approximately 247.918 trillion KRW), a level sufficient to sustain the war for the next two years.

This content was produced with the assistance of AI translation services.