As the Israeli American war on Iran continues, public and international attention remains focused on security developments. Yet another front is quietly intensifying beneath the surface, one with far reaching consequences: the psychological state of Israelis and its growing economic cost.
Professor Itamar Grotto, former deputy director general of the Ministry of Health, member of the executive board of the World Health Organization, and emeritus professor at Ben Gurion University with over 220 scientific publications, explains that for many Israelis, the current phase of war is not defined by a single shocking event, but by a prolonged reality of uncertainty, tension, and psychological pressure.
He notes that repeated sirens, disrupted routines, and a constant sense of threat are not merely personal challenges, but cumulative factors directly impacting economic performance.
Psychological Strain Translates into Economic Decline
In an article published by Zman Israel and translated by Arabi21, Grotto states that the psychological impact is no longer an abstract issue. In recent years since the onset of conflict, there has been a steady rise in the consumption of antidepressants and anti anxiety medications.
This increase reflects more than a rise in treatment demand. It signals a broader structural shift, as more workers struggle to maintain consistent performance over time. The economic consequences are becoming increasingly visible, including declining productivity, rising absenteeism, increased burnout, and both direct and indirect costs imposed on employers and the wider economy.
A Strained Mental Health System
Grotto emphasises that while pharmaceutical treatments remain important, they do not offer a complete solution. When suffering stems from prolonged exposure to stress, instability, and collective trauma, a comprehensive response becomes essential.
The absence of such a response is not only a medical issue, but an economic risk. Israel’s mental health system, already under pressure for years, is now facing rising demand. Long waiting times, a shortage of specialists, and gaps in access to services mean that many individuals are not receiving timely treatment.
Long Term Economic Consequences
According to Grotto, the cumulative outcome of nearly a month of ongoing war is a deterioration in the psychological condition of Israelis, alongside declining personal and professional performance.
At a macroeconomic level, this presents a serious challenge. Mental health directly affects labour productivity, workforce participation, the education system, and family stability, all of which are fundamental pillars of a functioning economy. Individuals under sustained psychological pressure are unable to reach their full economic potential, even if other systems continue to operate.
He further highlights the long term costs associated with ongoing treatment, lost workdays, reduced productivity, and in some cases, complete withdrawal from the workforce. This creates a compounding burden that, if left unaddressed, could affect economic growth for years.
Importantly, he stresses that these psychological responses are not abnormal, but rather natural human reactions to prolonged stress.
A Growing Internal Burden
Grotto adds that addressing these consequences cannot fall solely on individuals. It requires a comprehensive national response. While Israel continues to confront external threats, it must also invest internally, not only for social reasons but for clear economic necessity.
Even if the fighting were to end, the psychological impact would not disappear overnight. The Israeli economy will be forced to deal with these effects over time. According to Grotto, a phase of stagnation has already begun, and the key question is not only how Israel will respond, but how costly it will be if it fails to do so.
Business Sector Under Pressure
Writer Kobi Arieli highlights that alongside financial losses, obligations, and economic damage, the war has created an overwhelming and persistent anxiety about the future.
Drawing on the experience of more than two years during the war on Gaza, many self employed individuals have already endured significant hardship. Today, their concerns are increasingly vocal, marked by grief over losses and fear of what lies ahead.
In an article published by Israel Hayom and translated by Arabi21, Arieli explains that one of the key economic consequences of the war is the growing uncertainty facing workers. Business preparation cycles typically take between one to three months, yet under conditions of war and constant missile alerts, there is little room for planning, progress, or operational movement.
An Economy Moving Backwards
Arieli concludes that uncertainty continues to overshadow all aspects of economic activity. Progress feels unstable, with every step forward followed by setbacks.
He notes that Israel is currently facing its fourth economic crisis in recent years since the Covid 19 pandemic. For self employed individuals, this crisis is being experienced with significant pain and anxiety, as economic instability deepens under the weight of prolonged conflict.
