Israel’s fiscal deficit has surged to 8.1% of its GDP, amounting to 8.5 billion shekels (approximately $2.2 billion dollars) over the past 12 months, largely due to the ongoing war in Gaza and the conflict with Hizbullah.
The Israeli Ministry of Finance attributes the spike primarily to elevated defense and security spending, alongside increased civilian ministry costs related to the conflict.
This marks the fourth consecutive month where the deficit has exceeded the government’s target of 6.6% for 2024, with a noticeable rise from 4.2% in 2023. The government continues to invest billions of shekels in the war efforts, with the deficit steadily climbing each month—7.6% in June, 7.2% in May, and 7% in April—reflecting the heavy financial burden of military and civilian expenses.
In July, public spending saw a 33% increase compared to the same period in 2023, with the total cost of the conflict since the October 7 attack by Hamas reaching 88.4 billion shekels.