War With Iran Could Cost Israel’s Economy $42 Billion: Study
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An attack on Iran’s nuclear facilities by Israel’s military could cost the Jewish state nearly 167 billion shekels ($42 billion) in economic damage over five years, said business information firm BDI-Coface on Monday, with an estimated 10 percent of all small new businesses expected to collapse due to the inevitable economic slowdown.
An attack on Iran’s nuclear facilities by Israel’s military could cost the Jewish state nearly 167 billion shekels ($42 billion) in economic damage over five years, said business information firm BDI-Coface on Monday, with an estimated 10 percent of all small new businesses expected to collapse due to the inevitable economic slowdown.
BDI’s report, which was extrapolated using figures from the 2006 Second Lebanon War, estimated that the initial direct cost of a war would reach $12 billion; while nearly $6 billion a year would also be lost over a five-year-period as a result of the economic fallout.
[quote]”Using a conservative estimate that 10 percent of new and small business will collapse as a result of a war, because of lack of monetary reserves and reduced demand, we estimate that the economy will lose approximately $6 billion a year over a period of 3-5 years” the report said.[/quote]According to Israel National News, the cost of a war with Iran would be nearly triple that of the 2006 Second Lebanon War. Back then, Israel’s economy had shrunk by 0.5 percent of its GDP as a direct consequence.
And “the brunt of the damage in the Second Lebanon War was felt only in the north (of Israel),” noted BDI.
[quote]“It is reasonable to assume that in the event of war with Iran, it will include the centre of the country, which accounts for approximately 70 percent of total production,” they added.[/quote]In an interview with Channel 2 News on August 10, Bank of Israel Governor Stanley Fischer also warned that a “major crisis” may occur if Israel follows through with plans to attack Iran.
Though Fischer noted that the central bank was “preparing to face a real crisis…Scenarios in which Israel faces all-out war would be very difficult to deal with.”
[quote]“The foremost responsibility of any country is the security of its citizens,” Fischer said, as cited by The Jerusalem Post. “If there is a need to take money and spend more on defense, then that simply is what will have to be done, and we will have to pay for it…”[/quote]Related: A Global Perfect Storm – Why The World Faces An Economic Crisis In 2013: Nouriel Roubini
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On their part, Ayatollah Yousef Sanei, one of the leading interpreters of Muslim law in Iran, has urged his nation’s leaders not to further fan the flames of war with Israel.
“We must all do our best to prevent the Zionist attacks on Iran, because if they happen, Iran will be hurt greatly, even though the Zionist regime will be hurt even more,” the ayatollah was quoted as saying by the YNet News.
“We should not act, God forbid, as warmongers in our country and provoke a war. The nation is currently in a special condition, and the most important task is to shut the Zionist regime up with our thoughts, pen, and correct efforts and actions,” he said.
But Iran’s President Mahmoud Ahmadinejad appears to be unmoved. Last week, Ahmadinejad told his entire country, in a speech broadcasted on Iranian TV, that the “very existence of the Zionist regime is an insult to humanity.”
Israel’s outgoing home front defence minister Matan Vilnai also told the Maariv newspaper, as cited by BBC News, that Israel was “prepared as never before” for war, which he estimates will take 30 days.
