Knesset Election: What the Costs of War Mean for Israel's Voters

Before the Knesset election What the costs of war mean for Israel's voters As of: October 22, 2026 • 9:56 a.m

Security is at the forefront of Israel's election campaign. But three years of war have hit the economy hard: for many people, before the election on October 27th, the question is also about what will happen next economically.

In Tel Aviv, Asaf Beeri enjoys leading groups of tourists through his country. But since the war, hardly any tour groups have come to Israel. And when there are visitors, he often hears that the country is expensive.

Beeri can understand that well: "When they arrive, they say the food is good, but it's expensive in Israel." And that's true, the cost of living is dramatically high, he says. "I eat out less often and don't travel. I would have liked to move, but the rent is too expensive. I wanted to buy a new car. I'll wait and see."

His own financial situation increasingly worsened during the war:

For him, his personal financial situation has a significant influence on who he wants to vote for in the upcoming parliamentary elections - even if issues such as Israel's security and an end to the war are also at the forefront. He also wants a government that does not further divide Israeli society, he adds.

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In addition to his work as a tour guide, Beeri works as a graphic designer. But orders have also fallen in this area. Given the difficult situation, companies have to carefully consider how they spend their money, he says. "Graphic design is a luxury for companies that think about: Do I pay salaries or invest in marketing? There are fewer customers. Everyone wants to save even more. The state is spending so much money on war."

Beeri also works with reservists returning from war. Many of them are traumatized and some can no longer carry out their previous jobs. The consequences of the war are evident not only in public budgets and companies, but also in the lives of people who are trying to get back to a normal working life.

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The economic burdens are being felt across the country. According to estimates by the Israeli Central Bank, three years of war have cost the Israeli economy the equivalent of more than 100 billion euros.

At the same time, higher taxes are putting a strain on private households. The Israeli government increased VAT two years ago. Many companies have to cope with production downtimes and a lack of workers.

Israel's high-tech sector continues to have strong exports. But the war is making itself felt there too. Reservists are repeatedly called up for military service. They then fail in their businesses.

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Economic researcher Ayal Kimhi from the Shoresh Institute in Rehovot is observing the consequences for companies and society. The economic situation is currently not playing a major role in the parties' election campaign, he says. However, the effects on the population are significant.

According to the researcher, the consequences extend far beyond the immediate costs of war. Because in order to finance the expenses for the war, the state budget is being heavily strained. This could affect the long-term growth of the Israeli economy. "The next generation will pay because the government is stretching the budget so much at the expense of growth," says Kimhi.

This raises the question of how Israel can cope with the economic damage in the long term. Even if the security situation improves, the financial consequences will not simply disappear. The next government must grapple with how it can stabilize the economy, support businesses and create new prospects for the population.

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Kimhi is particularly concerned about the impact of the war on the education sector. Many students had to interrupt or abandon their studies because of their reserve service. In the long term, this could lead to a shortage of qualified specialists.

This would be an additional problem for an economy that relies heavily on technology, research and a well-trained workforce. A lack of skilled workers can not only slow down individual companies. They can also make it more difficult to develop new products and create new jobs.

Companies have to make do without employees, young people cannot continue their education as planned, and the state has to finance high expenses. At the same time, the cost of living is rising for many households.

And so before the election, Asaf Beeri in Tel Aviv is also concerned with regaining more financial leeway - and being able to hope for an end to the war.

This topic in the program: NDR Info | News | Oct 21, 2026 | 11:47 am