Tension is at its peak in the Middle East after the recent attacks by America and Israel on military bases of Iran. Iran has made it clear that it will end this war itself. Amidst these threats, a big question arises that if this war continues for a long time, how will the economies of both the countries be able to bear this devastating blow.
Who has the upper hand in the battle for treasure?
Wars are fought not only with weapons but also with treasures. Israel has strong economic support from America and Western countries, due to which it can bear the economic burden of a long war. At the same time, Iran’s economic condition has already become very weak due to the strict sanctions of western countries. In such a situation, it will not be easy for Iran to endure a long conflict.
If we look at the figures, Israel’s position appears quite strong. It is estimated that Israel’s GDP will reach $666.4 billion by the year 2026. The per capita GDP of this country with a population of about 10 million is around 60 thousand dollars. In contrast, Iran, with a population of 92.5 million, has a total GDP of just $375 billion and a per capita income of only $4,000.
How much loss did Israel suffer from the Gaza operation?
The ongoing military operation in Gaza since October 2023 has also caused deep wounds to Israel’s economy. According to a report, by the end of 2024, Israel has spent approximately $67.5 billion on this war. Considering the seriousness of the situation, the Israeli cabinet has approved a huge war budget of 35 billion dollars for this year.
The ongoing conflict has severely shaken Israel’s business structure. Nearly 60 thousand Israeli companies had to close their doors last year due to severe labor shortage, logistics disruptions and market slowdown. Along with this, there has also been a huge decline in the number of tourists coming to the country, which is a big blow to the economy there.
Iran’s economy is suffering due to sanctions
While Israel’s economy is based on innovation, high-tech exports and service sector, Iran is completely dependent on crude oil earnings. Strict sanctions by America and Western countries have broken the back of Iran’s currency. Today the price of Iranian Rial has fallen to 14,434 against one Indian Rupee. Inflation is skyrocketing in the country.
Iran’s economy is tightly controlled by the Revolutionary Guard and Islamic organizations, which do not pay any taxes or accounts. This opaqueness has further weakened the economic foundation of the country. The service sector contributes 47% to Iran’s GDP, industry 40% and agriculture only 12.5%. Experts believe that Iran is not at all ready for a long war.
Iran’s future depends on oil wells
The largest share of Iran’s industrial revenue comes from the oil industry, with more than 90 percent of its total exports going to China alone. Despite Western sanctions, this trade with China continues without any interruption. But if Israel targets Iran’s oil facilities amid the current tension, then Iran’s entire economy could collapse like a house of cards.
Due to continuous international sanctions, the standard of living of ordinary citizens of Iran has fallen rapidly. A large population of the country is now forced to live below the poverty line. If the fire of war flares up further, the situation will become worse for the people of Iran, who are already suffering from economic crisis and rampant inflation.