In a recent report, financial advisory firm Leader Capital Markets in Israel has estimated that the aggressive military campaign on the besieged Gaza Strip is set to cost the occupying regime approximately $48 billion, with the burden heavily relying on bond markets.
The firm's analysis indicated that Israel is expected to bear two-thirds of the total costs, while the United States is anticipated to cover the remaining portion. The ongoing conflict, which began in October, is estimated by the Israeli finance ministry to be draining the economy at a rate of $270 million per day.
The fiscal impact is so significant that the Bloomberg report cited the firm as stating, "Israel’s fiscal math means the government will largely have to borrow its way through what’s already its worst armed conflict in half a century."
To meet these financial challenges, Israel has resorted to issuing international debt in various currencies, including yen, euros, and dollars, through private placements facilitated by Wall Street banks, such as Goldman Sachs Group Inc. Despite this, the Israeli government is banking on the domestic market to absorb the majority of its financing needs.
Since the commencement of the conflict, Tel Aviv has already "sold 18.7 billion shekels of local bonds," a stark contrast to the monthly average of just over 5 billion shekels observed up to September. This increased reliance on borrowing signals the severe strain on Israel's financial resources as it navigates one of its most intense armed conflicts in recent history.
