Israel’s Parliament gave final approval on Thursday to a revised 2024 budget swollen by defence outlays that will bring spending to an all-time high.
The vote in the Knesset overcame delays after several members of Prime Minister Benjamin Netanyahu’s ruling coalition threatened to derail the measure if their budgetary requests weren’t met. The fiscal plan envisages a deficit of 6.6% of gross domestic product, a shortfall set to be among the widest for Israel this century.
Expenditure will total 584 billion shekels ($160-billion), up almost 70 billion shekels from the budget’s pre-war version. Defence spending alone will go up by 55 billion shekels.
The budget that emerged from weeks of controversy reflects the competing pressures the government needs to balance as the military campaign against Hamas enters its sixth month. The fiscal costs of Israel’s worst armed conflict in 50 years have forced the government to rely far more on debt to fund its needs and pay a war bill the central bank estimates at 255 billion shekels over 2023-2025.
The surge in spending, alongside an expected drop of 36 billion shekels in revenue, forced budget cuts and led to a separate parliamentary approval of a set of adjustments involving new taxes. But political disagreements at the last minute meant some measures were left out, shrinking the original 25 billion shekel package by almost 10% for 2024-2025.
