Due to conflict, Israel approved a budget increase of USD 19 billion

The state budget for 2024 was updated and approved by the Knesset on Wednesday. This budget covers the costs associated with the “Iron Swords” battle against Hamas in Gaza. The revised state budget, which amounts to over 584 billion shekels (USD 162 billion), shows an expenditure rise of almost 70 billion shekels (USD 19.4 billion).

A substantial increase in defense spending is included in the budget, both for the army’s reinforcement and for the reimbursement of fighting costs. Other expenditures include security components for the settlements and their protection from Gaza, extensive support for the mental health system, funding for the Takuma administration’s reconstruction of the surrounding area, evacuation of the settlements, and assistance in accelerating the real estate and high-tech industries.

The budget update contains changes of around 20 billion shekels (USD 5.6 billion) for 2024 and 2025, with an estimated deficit of 6.6% of GDP for 2024.

A number of other measures to boost state income were also approved by the government, including taxing bank profits and shortening the recuperation day for paid workers as part of a deal with Israel’s major labor union, the Histadrut.

Shlomi Heisler, the Director General of the Ministry of Finance: “The updated budget for 2024 will enable the implementation of the war efforts, strengthening the resilience of the Israeli economy, and will allow the reservists and reserve networks to be rewarded for their contribution to the security of the state.”