The Gaza conflict, which began on October 7, 2023, has resulted in immense human suffering and widespread destruction.
As of October 10, 2025, a ceasefire has been established, offering a glimmer of hope for peace. However, the economic repercussions of the war are staggering and will be felt for decades. This article delves into the financial toll of the conflict, examining military expenditures, infrastructure damage, and the long-term costs of reconstruction.
Military Expenditures and Direct Costs
The war has imposed significant financial burdens on both Israel and Gaza. Israel's military operations have been costly, with the Bank of Israel estimating that the conflict has cost the Israeli economy approximately $600 million per week due to work absences, equating to about 6% of the weekly GDP. Additionally, the Ministry of Finance reported a daily direct cost of $246 million. If the war continued for eight to twelve months, the total cost to Israel's economy was projected to exceed $50 billion, nearly 10% of its GDP.
On the Palestinian side, the economic impact has been devastating. Reuters reports that the United Nations and World Bank estimate that over $53 billion will be required for recovery and reconstruction over the next decade. This includes rebuilding homes, schools, hospitals, and critical infrastructure, all of which have been severely damaged or destroyed.
Israeli tanks and fighter jets in action, contributing to the widespread destruction and rubble in Gaza.
Infrastructure Damage and Reconstruction Costs
The Guardian outlines how the physical destruction in Gaza is unprecedented. According to a joint assessment by the United Nations, European Union, and World Bank, more than 50 billion tons of infrastructure damage have occurred. Approximately 92% of Gaza's homes have been damaged or destroyed, and nearly 80% of its infrastructure lies in ruins, including schools, hospitals, and cultural heritage sites.
Rebuilding efforts are projected to take decades. The United Nations Development Programme estimates that reconstruction could cost as much as $40 billion and may take until 2040 in the most optimistic scenario. This includes the reconstruction of over 79,000 homes that were completely destroyed and another 370,000 that were damaged.
International Spending on Gaza War: Aid and Arms
The Gaza conflict, which began on October 7, 2023, has drawn significant international involvement, both in terms of military support to Israel and humanitarian aid to Palestinians. This section examines the financial contributions made by various countries and organizations in these two areas.
Military Support to Israel
The United States has been the most prominent military supporter of Israel during the conflict. According to a report by the Costs of War Project, the U.S. government has provided at least $21.7 billion in military aid to Israel since the start of the war in October 2023. This figure includes direct military assistance and arms transfers, such as laser-guided missiles, artillery shells, and bunker-buster bombs. Additionally, the U.S. has committed tens of billions of dollars in future arms sales agreements, which are expected to be paid for and delivered in the coming years.
Other countries have also contributed military support to Israel, though on a smaller scale. For instance, Germany has provided €29 million (approximately $31 million) in humanitarian aid, which includes medical and psychological care for those released from hostage situations.
Humanitarian Aid to Gaza
In response to the humanitarian crisis in Gaza, numerous countries and organizations have pledged financial assistance for relief and reconstruction efforts.
United States: Beyond military aid, the U.S. has allocated funds for humanitarian assistance. For example, the U.S. has sent approximately 200 troops to Israel to support and monitor the Gaza ceasefire deal, which includes facilitating humanitarian aid.
Germany: In addition to its €29 million in humanitarian aid, Germany is co-hosting a Gaza reconstruction conference with Egypt, focusing on rebuilding essential infrastructure such as water supply, energy, and healthcare systems.
Spain: The Diputación de Badajoz has approved €100,000 in humanitarian aid for Gaza, in cooperation with UNICEF and the UNRWA. This funding aims to provide nutritional support to children and support healthcare services for displaced populations.
United Nations: The UN has mobilized significant resources to address the crisis. As of October 9, 2025, the UN had 170,000 metric tons of food, medicine, and supplies ready for delivery to Gaza. The organization plans to increase aid shipments to 500–600 trucks per day, aiming to deliver food for 2.1 million people, provide medical and psychological care, and restore water and sanitation infrastructure.
Total Financial Contributions
While precise figures are challenging to compile due to the complexity of international aid and arms transfers, estimates suggest that the combined military and humanitarian expenditures related to the Gaza conflict are substantial. The U.S. alone has committed over $21 billion in military aid, with additional arms sales agreements extending into the tens of billions. Humanitarian aid from various countries and organizations adds billions more to this total.
These financial commitments underscore the international community's involvement in the Gaza conflict, reflecting both support for Israel's security and efforts to alleviate the humanitarian crisis faced by Palestinians.
Gaza from above: an aerial perspective reveals the full extent of destruction and rubble left by the conflict.
Long-Term Economic Impact
The long-term economic consequences of the war are profound. Israel is projected to lose approximately $400 billion in economic activity over the next decade due to the conflict. This figure encompasses indirect effects such as reduced investment, a deteriorating labor market, loss of productivity, and overall economic decline according to Anadolu Ajansı.
For Gaza, the economic repercussions are even more severe. The war has decimated critical infrastructure, including the education and healthcare systems. Approximately 90% of schools and many universities have been damaged, leaving nearly 745,000 students without formal education. Most hospitals are damaged or destroyed, and over 1,700 healthcare workers have been killed. The collapse of these systems has long-term implications for human capital development and economic recovery.
People Also Ask
What is the estimated cost of rebuilding Gaza?
Rebuilding Gaza is projected to cost over $53 billion over the next decade, according to a joint assessment by the United Nations, European Union, and World Bank.
How much has Israel spent on the Gaza conflict?
Israel's military operations have cost the economy approximately $600 million per week due to work absences, equating to about 6% of the weekly GDP.
What is the long-term economic impact of the Gaza war?
Israel is projected to lose approximately $400 billion in economic activity over the next decade due to the conflict, encompassing indirect effects such as reduced investment and productivity.
How many people have been affected by the Gaza conflict?
Over 67,000 Palestinians have been killed, and nearly 170,000 have been injured. Approximately 95% of Gaza’s population, about 2.1 million people, have been displaced.
What is the status of the ceasefire in Gaza?
As of October 10, 2025, a ceasefire has been established, offering a glimmer of hope for peace. However, the long-term stability and effectiveness of the ceasefire remain uncertain.
Conclusion
The Gaza conflict has exacted a heavy toll, both in human lives and economic resources. The combined costs of military expenditures, infrastructure damage, and long-term economic decline are estimated to exceed $400 billion. This figure underscores the urgent need for international support and a comprehensive plan for reconstruction and recovery. As the ceasefire holds, the focus must shift to rebuilding lives and livelihoods, ensuring that the scars of war do not define the future of Gaza and its people.
