Damage to the Weizmann Institute of Science from an Iranian missile strike on Rehovot on June 19. AP
Damage to the Weizmann Institute of Science from an Iranian missile strike on Rehovot on June 19. AP
Damage to the Weizmann Institute of Science from an Iranian missile strike on Rehovot on June 19. AP
Damage to the Weizmann Institute of Science from an Iranian missile strike on Rehovot on June 19. AP

Israel's economic losses as a result of Iran war estimated at $6bn


Fareed Rahman
  • English
  • Arabic

The total economic losses to Israel following the 12-day war with Iran are estimated at around $6 billion, with infrastructure hit particularly hard.

The war is likely to cost Israel about 1 per cent of its gross domestic product, or about 20 billion shekels ($5.9 billion), Israel Central Bank Governor Amir Yaron told Bloomberg television.

According to Naser Mufrej, professor of finance and economics at the Arab American University in Ramallah, along with heavy damage to property, the total losses also include revenue affected due to the brief closure of Israel’s airspace as well as the impact on manufacturing and agriculture sectors.

“All productive sectors were affected heavily during the war,” Mr Mufrej told The National.

Israel and Iran entered into a fragile ceasefire this week after days of attacking each other. The US also entered the war with a strike on Iran's nuclear sites, after which the President Donald Trump announced the ceasefire.

The conflict began on June 13 when Israel launched a wave of strikes across Iran, killing senior military officials and hitting nuclear sites. Iran also launched retaliatory missile strikes on Israel, hitting a number of targets including residential buildings, a hospital and other infrastructure in Tel Aviv and other cities.

  • Damaged buildings are seen following a missile attack from Iran, in Bat Yam, Israel, June 15, 2025. REUTERS / Ronen Zvulun
    Damaged buildings are seen following a missile attack from Iran, in Bat Yam, Israel, June 15, 2025. REUTERS / Ronen Zvulun
  • Israeli soldiers search for survivors amid the rubble of residential buildings destroyed by an Iranian missile strike in Bat Yam, central Israel, on Sunday, June 15, 2025. (AP Photo / Ariel Schalit)
    Israeli soldiers search for survivors amid the rubble of residential buildings destroyed by an Iranian missile strike in Bat Yam, central Israel, on Sunday, June 15, 2025. (AP Photo / Ariel Schalit)
  • A plume of heavy smoke and fire rise over an oil refinery in southern Tehran, after it was hit in an overnight Israeli strike, on June 15, 2025. Iran fired a fresh barrage of missiles at Israel, state television announced early on June 15, as the rivals exchanged fire for a third day. (Photo by ATTA KENARE / AFP)
    A plume of heavy smoke and fire rise over an oil refinery in southern Tehran, after it was hit in an overnight Israeli strike, on June 15, 2025. Iran fired a fresh barrage of missiles at Israel, state television announced early on June 15, as the rivals exchanged fire for a third day. (Photo by ATTA KENARE / AFP)
  • Members of Israel's Home Front Command search for missing people under the rubble of a partially collapsed residential building after Iranian ballistic missiles hit Bat Yam, central Israel, 15 June 2025. Iran launched a barrage of ballistic missiles at Israel overnight in retaliation for Israeli airstrikes on Iranian targets. Magen David Adom (MDA), Israel's national emergency services, reported at least six killed and dozens injured, including two in critical condition. EPA / ABIR SULTAN
    Members of Israel's Home Front Command search for missing people under the rubble of a partially collapsed residential building after Iranian ballistic missiles hit Bat Yam, central Israel, 15 June 2025. Iran launched a barrage of ballistic missiles at Israel overnight in retaliation for Israeli airstrikes on Iranian targets. Magen David Adom (MDA), Israel's national emergency services, reported at least six killed and dozens injured, including two in critical condition. EPA / ABIR SULTAN
  • Members of Israel's Home Front Command search for missing people under the rubble of a partially collapsed residential building after Iranian ballistic missiles hit Bat Yam, central Israel, 15 June 2025. Iran launched a barrage of ballistic missiles at Israel overnight in retaliation for Israeli airstrikes on Iranian targets. Magen David Adom (MDA), Israel's national emergency services, reported at least six killed and dozens injured, including two in critical condition. EPA / ABIR SULTAN
    Members of Israel's Home Front Command search for missing people under the rubble of a partially collapsed residential building after Iranian ballistic missiles hit Bat Yam, central Israel, 15 June 2025. Iran launched a barrage of ballistic missiles at Israel overnight in retaliation for Israeli airstrikes on Iranian targets. Magen David Adom (MDA), Israel's national emergency services, reported at least six killed and dozens injured, including two in critical condition. EPA / ABIR SULTAN
  • TEHRAN, IRAN - JUNE 15: Fire and smoke rise into the sky after an Israeli attack on the Shahran oil depot on June 15, 2025 in Tehran, Iran. Iran's foreign minister said the country would respond decisively and proportionally to a wave of attacks that Israel launched beginning in the early hours of June 13. The attacks targeted multiple military, scientific and residential locations, as well as senior government officials. (Photo by Stringer / Getty Images)
    TEHRAN, IRAN - JUNE 15: Fire and smoke rise into the sky after an Israeli attack on the Shahran oil depot on June 15, 2025 in Tehran, Iran. Iran's foreign minister said the country would respond decisively and proportionally to a wave of attacks that Israel launched beginning in the early hours of June 13. The attacks targeted multiple military, scientific and residential locations, as well as senior government officials. (Photo by Stringer / Getty Images)
  • Responders work beside a damaged building following an Iranian ballistic missile attack in the Israeli city of Bat Yam, south of Tel Aviv, on June 15, 2025. Air raid sirens rang out in Jerusalem and Tel Aviv, AFP journalists said, as Israel and Iran exchanged fire for a third day. AFP
    Responders work beside a damaged building following an Iranian ballistic missile attack in the Israeli city of Bat Yam, south of Tel Aviv, on June 15, 2025. Air raid sirens rang out in Jerusalem and Tel Aviv, AFP journalists said, as Israel and Iran exchanged fire for a third day. AFP
  • Israeli rescue teams work at the scene where Iranian ballistic missiles hit residential buildings in Bat Yam. According to emergency service Magen David Adom, paramedics pronounced the death of a woman about 60 years old and provided medical care to a total of 65 injured. EPA
    Israeli rescue teams work at the scene where Iranian ballistic missiles hit residential buildings in Bat Yam. According to emergency service Magen David Adom, paramedics pronounced the death of a woman about 60 years old and provided medical care to a total of 65 injured. EPA
  • Israeli rescue teams work at the scene. EPA
    Israeli rescue teams work at the scene. EPA
  • Israeli security troops inspect a destroyed building that was hit by a missile fired from Iran, near Tel Aviv. AP
    Israeli security troops inspect a destroyed building that was hit by a missile fired from Iran, near Tel Aviv. AP
  • Responders take a person on a stretcher following a strike by an Iranian missile in Bat Yam. AFP
    Responders take a person on a stretcher following a strike by an Iranian missile in Bat Yam. AFP
  • Israeli security troops inspect destroyed buildings that were hit by a missile fired from Iran, near Tel Aviv. AP
    Israeli security troops inspect destroyed buildings that were hit by a missile fired from Iran, near Tel Aviv. AP
  • Responders work amid building rubble following a strike by an Iranian missile in Bat Yam. AFP
    Responders work amid building rubble following a strike by an Iranian missile in Bat Yam. AFP
  • Missiles launched from Iran towards Israel are intercepted. Reuters
    Missiles launched from Iran towards Israel are intercepted. Reuters
  • Fire and smoke at Tehran's oil warehouse in Iran. The Israeli army is continuing its strikes on Iran's nuclear programme and energy sites. EPA
    Fire and smoke at Tehran's oil warehouse in Iran. The Israeli army is continuing its strikes on Iran's nuclear programme and energy sites. EPA
  • Rescue personel work at a residential building following missile attack from Iran on Israel, at central Israel June 15, 2025. REUTERS/Yossi Zeliger ISRAEL OUT. NO COMMERCIAL OR EDITORIAL SALES IN ISRAEL
    Rescue personel work at a residential building following missile attack from Iran on Israel, at central Israel June 15, 2025. REUTERS/Yossi Zeliger ISRAEL OUT. NO COMMERCIAL OR EDITORIAL SALES IN ISRAEL
  • An emergency worker carries a dog rescued from a building damaged in an overnight strike on June 14, 2025 in Ramat Gan, Israel. Getty Images
    An emergency worker carries a dog rescued from a building damaged in an overnight strike on June 14, 2025 in Ramat Gan, Israel. Getty Images
  • People look at the damage to residential building after a ballistic missile strike in Ramat Gan, near Tel Aviv, Israel. EPA
    People look at the damage to residential building after a ballistic missile strike in Ramat Gan, near Tel Aviv, Israel. EPA
  • Emergency and rescue workers on site at a building in Ramat Gan, Israel. Getty Images
    Emergency and rescue workers on site at a building in Ramat Gan, Israel. Getty Images
  • A rescue worker carries a dog away from a bombed building in Ramat Gan, Israel. Reuters
    A rescue worker carries a dog away from a bombed building in Ramat Gan, Israel. Reuters
  • Israeli rescue teams at the site of an Iranian ballistic missile strike on residential Rishon LeZion, near Tel Aviv, where 21 people were injured. EPA
    Israeli rescue teams at the site of an Iranian ballistic missile strike on residential Rishon LeZion, near Tel Aviv, where 21 people were injured. EPA
  • Rescue teams surrounded by gutted vehicles at a missile impact site in Rishon LeZion, Tel Aviv, on June 14, 2025. Reuters
    Rescue teams surrounded by gutted vehicles at a missile impact site in Rishon LeZion, Tel Aviv, on June 14, 2025. Reuters
  • Householders in Rishon LeZion look over the damage to their home. AP Photo
    Householders in Rishon LeZion look over the damage to their home. AP Photo
  • Damage assessments in daylight at Rishon LeZion after a wave of Iranian missiles hit. AP Photo
    Damage assessments in daylight at Rishon LeZion after a wave of Iranian missiles hit. AP Photo
  • Israel's Iron Dome air defence system is sent to intercept a projectile over the West Bank city of Nablus on June 14. EPA
    Israel's Iron Dome air defence system is sent to intercept a projectile over the West Bank city of Nablus on June 14. EPA
  • Air defences in action against missiles over Tel Aviv on June 14, 2025. AP Photo
    Air defences in action against missiles over Tel Aviv on June 14, 2025. AP Photo

Israel, which has also been attacking Gaza since October 2023, is expected to take a hit to economic growth this year, according to analysts.

"Our forecast for 2025 [for Israel's economy] was downgraded from 3.3 per cent real GDP growth to 1.7 per cent real growth right after the military conflict began between Israel and Iran almost two weeks ago," Ralf Wiegert, head of Mena Economics at S&P Global Market Intelligence.

"So a reduction of 1.6 percentage points is probably at the high end of the spectrum and could be reduced further as Israel is going back to full capacity over the next couple of days."

Mr Wiegert also said that "replenishing the military arsenal will be more costly, which will increase the budget deficit in 2025 from the 5.7 per cent of GDP which we had projected previously".

With missile strikes having damaged vital infrastructure, military spending will push the country's fiscal deficit from 5.5 per cent to 8.5 per cent of GDP, the International Institute of Finance said in a note.

"Public debt will rise from 69 per cent to 74 per cent. Still, Israel’s strong external position, ample reserves, and moderate debt burden offer resilience," it added.

Before the war with Iran, the International Monetary Fund in its World Economic Outlook in April projected Israel's economy to grow 3.2 per cent this year.

Rising compensation claims

Israel's Tax Authority has been receiving thousands of compensation claims from affected people for damaged property and vehicles since the beginning of the war two weeks ago.

As of Wednesday, it had received 41,651 claims, including 32,975 for structural damage, 4,119 for vehicle damage, and 4,456 for damage to contents and equipment.

It is estimated that thousands of additional structures have been damaged, for which no claim has yet been submitted, according to the Israel Tax Authority website.

Last week, Iran hit the Weizzman Institute, a major research institution in Israel, causing heavy damage to the building. It also hit the Bazan oil refinery complex in the port city of Haifa, damaging its infrastructure and shutting down its operations.

The cost of property damages from the Iranian attacks is estimated to be around double the sum of claims stemming from the Hamas attack on October 7 and subsequent attacks in time since then, the head of the Tax Authority’s compensation department told the Knesset finance committee on Monday.

“I believe that we'll reach 5 billion shekels ($1.47 billion) [in compensation],” Amir Dahan said at the time.

“These are amounts we have never seen in direct damage. The Weizmann Institute and Bazan are huge events. In total, we have 25 buildings for demolition; in comparison, from the start of the war until the round with Iran, there was one building for demolition."

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Company name/date started: Abwaab Technologies / September 2019

Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO

Based: Amman, Jordan

Sector: Education Technology

Size (employees/revenue): Total team size: 65. Full-time employees: 25. Revenue undisclosed

Stage: early-stage startup 

Investors: Adam Tech Ventures, Endure Capital, Equitrust, the World Bank-backed Innovative Startups SMEs Fund, a London investment fund, a number of former and current executives from Uber and Netflix, among others.

UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
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5.30pm: Maiden (TB) Dh82,500 (Dirt) 1,600m, Winner: Panadol, Mickael Barzalona (jockey), Salem bin Ghadayer (trainer)

6.05pm: Maiden (TB) Dh82,500 (Turf) 1,400m, Winner: Mayehaab, Adrie de Vries, Fawzi Nass

6.40pm: Handicap (TB) Dh85,000 (D) 1,600m, Winner: Monoski, Mickael Barzalona, Salem bin Ghadayer

7.15pm: Handicap (TB) Dh102,500 (T) 1,800m, Winner: Eastern World, Royston Ffrench, Charlie Appleby

7.50pm: Handicap (TB) Dh92,500 (D) 1,200m, Winner: Madkal, Adrie de Vries, Fawzi Nass

8.25pm: Handicap (TB) Dh92,500 (T) 1,200m, Winner: Taneen, Dane O’Neill, Musabah Al Muhairi

Day 1, Abu Dhabi Test: At a glance

Moment of the day Dimuth Karunaratne had batted with plenty of pluck, and no little skill, in getting to within seven runs of a first-day century. Then, while he ran what he thought was a comfortable single to mid-on, his batting partner Dinesh Chandimal opted to stay at home. The opener was run out by the length of the pitch.

Stat of the day – 1 One six was hit on Day 1. The boundary was only breached 18 times in total over the course of the 90 overs. When it did arrive, the lone six was a thing of beauty, as Niroshan Dickwella effortlessly clipped Mohammed Amir over the square-leg boundary.

The verdict Three wickets down at lunch, on a featherbed wicket having won the toss, and Sri Lanka’s fragile confidence must have been waning. Then Karunaratne and Chandimal's alliance of precisely 100 gave them a foothold in the match. Dickwella’s free-spirited strokeplay meant the Sri Lankans were handily placed at 227-4 at the close.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Completed an electrical diploma at the Adnoc Technical Institute

Works as a public relations officer with Adnoc

Apart from the piano, he plays the accordion, oud and guitar

His favourite composer is Johann Sebastian Bach

Also enjoys listening to Mozart

Likes all genres of music including Arabic music and jazz

Enjoys rock groups Scorpions and Metallica 

Other musicians he likes are Syrian-American pianist Malek Jandali and Lebanese oud player Rabih Abou Khalil

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Updated: June 26, 2025, 6:08 PM