Israeli Economy Under Strain as War With Iran Drives Weekly Losses of 9.4 Billion Shekels

The war waged by the United States and Israel against Iran is costing Israel economically. The cost borne by Israel’s economy due to the war with Iran is estimated to reach 9.4 billion Israeli shekels per week if restrictions on economic activity across the country remain in place (approximately 3 billion USD or around IDR 46.5 trillion).

The warning was issued by the Israeli Ministry of Finance on Wednesday, 4 March 2026. In a letter sent to the Head of the Home Front Command, Major General Shai Klapper, the Director-General of the Ministry of Finance Ilan Rom urged loosening of restrictions to enable the gradual reopening of businesses and workplaces from Thursday, 5 March 2026.

‘There is no dispute about the need to maintain a defence policy that is tailored to the security situation. However, at the same time, broad economic closures impose large economic costs,’ Rom said.

‘We need a solution that addresses the needs of Home Front defence as well as economic needs, after two and a half years the economy must pay a heavy price due to increased security requirements and the impact of the war with Hamas,’ he asserted.

The IDF Home Front Command declined to comment when contacted by The Times of Israel.

Following Israel and the United States launching an attack on Iran on Saturday, 28 February 2026, triggering retaliatory missile strikes from the Islamic Republic of Iran, the IDF Home Front Command issued national guidelines banning all gatherings, educational activities, and workplace activities, except for essential businesses.

The guidelines restricted travel to workplaces and forced employees to work from home, while schools remained closed.

Rom now asked Klapper to modify the Home Front Command restrictions from allowing only essential activities to limiting activities, known as the orange alert level, replacing the red level currently in effect.