Middle East: The Israeli occupation entity has suffered significant economic losses, which have drastically multiplied since it launched its aggression against the Islamic Republic of Iran at dawn on Friday, June 13.

Imad Akkoush, an economist and researcher, explains that “Israeli losses fall into two categories: direct losses—related to communications, military, and human casualties—and indirect losses, which impact migration patterns, especially reverse migration within the Israeli entity, and also the loss of investments due to the war.”

In an interview with Al-Masirah, he noted, “The Israeli economy is divided into several productive sectors like any global economy, including services, industry, agriculture, and tourism. The services sector makes up the largest share, contributing about 67 percent of Israel’s GDP, which is estimated at $540 billion.”

He explained that this sector heavily relies on tourism, medical services, and transport, all of which have halted due to the Iranian response.

As for the industrial sector, Akkoush stated it contributes around 17 percent to the GDP, while the tech sector adds about 14 percent.
“These sectors came to a standstill due to the Iranian missile strikes and the constant rush of settlers into shelters, preventing them from working. Additionally, large military reserve mobilization has disrupted civilian life, and agriculture—around 1.1 percent of GDP—has also ceased.”

He added, “When we talk about these sectors and a GDP of $540 billion, we’re talking about a daily output of approximately $1.5 billion. This means the Israeli entity is losing about $1.5 billion per day due to the economic shutdown.”

He further emphasized, “There is considerable material damage from the Iranian strikes, which is likely to increase, especially with the halt of the gas sector—a critical pillar for Israel, which was pumping around 30 million cubic meters daily.”

Akkoush noted, “This sector has come to a complete halt, as has tourism, which previously attracted about 4.5 million tourists annually. The desalination sector, which provides around 50 percent of Israel’s water supply, is also at risk. If desalination plants are targeted, the losses will multiply significantly.”

Reverse Migration and Indirect Losses

The indirect losses are evident in reverse migration and the increasing likelihood of Israeli settlers leaving, particularly those unable to endure long shelter stays, many of whom hold foreign passports.

“This reverse migration,” Akkoush warned, “will inflict substantial losses, compounded by capital flight and investor withdrawals—major indirect losses for the Israeli economy.”

The Impact of the Yemeni Blockade

Commenting on the Yemeni Armed Forces’ air blockade of Lod (Ben Gurion) Airport in occupied Jaffa, Akkoush affirmed that:

“Yemeni strikes and the blockade have drastically reduced tourism to the occupied territories. Before the Yemeni attacks, about 4.5 million tourists visited annually. That number plummeted to 1 million in 2024—an 80 percent drop.”

He explained that, “This severe decline, along with the complete airport shutdown, will deprive Israel of tourism revenues in 2024 and collapse the tourism sector, which is interconnected with other service industries—like transport, airlines, hotels, restaurants—thus increasing unemployment.”

He stressed, “Unemployment, already the highest in the region, will worsen due to the halt in tourism and transport, deepening Israel’s economic crisis.”

Budget Deficit and Soaring Public Debt Costs

With Iran’s strikes continuing into a second week, Akkoush warned that, “This will multiply Israel’s economic losses.”

He continued, “Looking at Israeli financial markets, the TA-35 index—Israel’s main economic indicator—has dropped by 1.6 percent. If the war continues, further decline is expected.”

He pointed out, “Israel’s public debt stands at about $380 billion. With the war dragging on, global rating agencies will likely downgrade Israel’s credit score, driving interest rates higher and raising the cost of servicing public debt and deepening the fiscal deficit.”

He added, “Public debt is currently around $220 billion. If interest rates rise, that figure could balloon. More critically, deposits in shekels total around 1.8 trillion shekels. Israel’s reserves, about $220 billion, won’t be enough if there’s a run on the banks—i.e., depositors converting to dollars or withdrawing en masse. That could lead to a severe banking crisis if withdrawals persist for more than two weeks to a month.”

Energy Sector Devastated by Iranian Strikes

Regarding the Iranian military’s targeting of key infrastructure—like the Haifa refinery—Akkoush stated, “Shutting down Israel’s gas wells deals a massive blow to the energy sector. Over 50 percent of Israel’s power plants rely on natural gas. With the wells offline, power plants lose their main fuel source, leading to massive electricity shortages and possibly severe rationing.”

He continued, “Iranian strikes on Israeli refineries will halt domestic fuel production—gasoline, diesel, etc.—since Israel heavily relies on local refining. The shutdown will result in long lines at gas stations, especially if the Iranian strikes persist, threatening fuel supply stability.”

Severing the Economic Lifeline

Akkoush explained, “Iran’s focus on bombing northern and central Israel—particularly the ‘Gush Dan’ region—is strategic. It’s the most densely populated area, housing over 70 percent of settlers and major industrial zones, including tech hubs like Google and Apple offices, and Israel’s main seaport.”

He stressed, “Targeting this region is vital and calculated. Iran knows when and how to hit it, as it’s the economic lifeline of the occupation.”

He added, “Sustained attacks here aim to cut Israel off from its primary economic resources—factories, corporations, and vital facilities like Lod Airport.”

In contrast, other regions—particularly the south (e.g., the Negev) and the north (near Lebanon)—are nearly empty. 

“Most settlers evacuated the north during the war and fled to the central region. Even those from southern areas like Eilat relocated to the center to escape increasing Yemeni missile strikes. That’s why the vast majority of settlers are now concentrated in the central region.”

Translated by Almasirah English website