Israel’s Wartime Budget Shows Huge War package, Drastic Slowdown of Economy

Israeli government on Friday passed budget, which is being termed as a ‘war budget’ as huge expenses have been allotted on security as the war entered its second year with no immediate end in sight.

The budget showed that Israel has decided to boost its military spending by billions of shekels to meet the cost of war as its troops are in Gaza and Lebanon, apart from its air-power spending huge almost every day. The budget also showed drastic slowdown of Israeli economy, mainly due to lack of workers, news organisations have reported.

The growth rate envisaged in the budget has been brought down to just 0.4 per cent from the earlier 1.1 per cent, according to reports. The budget includes a roughly 40-billion-shekel package of tax hikes. Overall spending has been set at 744 billion shekels ($199.23 billion), of which 161 billion will go towards debt servicing, according to reports of news organisations.

“The main goal in the 2025 budget is maintaining the security of the state and achieving victory on all fronts, while maintaining the resilience of the Israeli economy," news reports said quoting Finance Minister Bezalel Smotrich.