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      Expert: Pillar of Defense Cost Tolerable for Economy

      As life in Israel gets back to normal after Operation Pillar of Defense, economists have begun tallying up the financial damage.
      By David Lev
      First Publish: 11/25/2012, 6:24 PM

      Rocket Damage in Ashdod
      Rocket Damage in Ashdod
      Flash 90

      As life in Israel gets back to normal after Operation Pillar of Defense, economists have begun tallying up the damage – physical, and financial. According to experts, the cost to the Israeli economy in damaged buildings and infrastructure, as well as lost business, was about NIS 1 billion ($240 million) in direct and indirect costs.

      Add to that the costs to the government for deployment of tens of thousands of soldiers who were poised to enter Gaza, and the dozens of Iron Dome missiles that (at $50,000 each) were used to shoot down incoming Hamas rocket. The bill on that end of the war was about NIS 1.2 billion (about $285 million), the experts said. And, according to Ron Eichel, a financial expert interviewed by Arutz Sheva, the government allocated an additional NIS 750 million (about $200 million) to resupply the Iron Dome system. The total bill? About $650 million to $700 million, said Eichel.

      While it sounds like a lot of money, said Eichel, things aren't as bad as they sound. “Not all the expenses, like the allocation for the Iron Dome rockets, will be spent at once,” and other expenses will be amortized over the coming months and years. “It's also clear that the IDF will absorb some of the cost of the operation from budget money that was already allocated, and it's likely that some of the funds to compensate civilians will come from other programs that will be cut that already serve the same populations.”

      All told, Eichel said, the war, even though it sounds expensive, won't have too much of an impact on the country's GDP -- “about 0.1%, not too big a deal,” he said.