The Economic Ramifications of Israel’s Pre-emptive Strikes on Hezbollah

In the morning of Sunday, Aug. 25, the Israeli army carried out a pre-emptive strike, launching intensive air raids with around 100 fighter jets targeting over 40 sites believed to be Hezbollah’s precision missile launch points. These sites were allegedly being prepared for strikes against Israel’s northern border in retaliation for last month’s assassination of Hezbollah’s military commander, Fouad Shukr. In response, Hezbollah launched a significant counterattack later in the morning, deploying numerous drones and firing over 320 Katyusha rockets at Israel, hitting 11 military targets. The escalation raises concerns, particularly as the Israeli government plans to allow residents to return to the northern areas they evacuated nine months ago. Should Israel fail to mitigate Hezbollah's ongoing strikes, the situation could have severe political and security repercussions for the government. This analysis examines the immediate and direct economic impacts of these mutual attacks on both sides of the border, and the potential broader consequences should the war continue and intensify.