Israel’s budget deficit hits $23.3B amid Gaza offensive
Flames and smoke rise during Israeli air strikes amid a flare-up, in the southern Gaza Strip May 11, 2021. (Reuters Photo)
Israel’s growing budget deficit has reached 84 billion shekels ($22.38 billion) from January to August this year, driven largely by the country’s ongoing military offensive in the Gaza Strip.
The Israeli Finance Ministry reported a continued rise in the deficit, which now stands at minus 8.3% of GDP as of August, up from minus 7.6% in June, minus 6.2% in March, and minus 4.1% in December 2023.
In contrast to last year, when Israel posted a modest budget surplus of 0.3 billion shekels ($79.9 million) during the same period, this year’s numbers show a sharp decline, attributed to increased military spending. The country’s expenditures rose by 31.8% year-on-year in the first eight months, while revenues increased by only 4%, according to data released by the Finance Ministry.
The budget deficit in August alone reached 12.1 billion shekels ($3.22 billion).
Israel’s military campaign in Gaza, which began following a Hamas attack in October 2023, has resulted in nearly 41,000 Palestinian deaths, with women and children making up a significant portion of the casualties, local health authorities reported. Critics of Prime Minister Benjamin Netanyahu’s government argue that the prolonged offensive serves his political interests, further straining the national economy and driving up the budget deficit.
