Israel’s Ministry of Finance has reported a budget deficit of 154 billion shekels ($41.6 billion) over the twelve months ending in October. According to the ministry’s statement, the deficit amounts to 7.9% of the Gross Domestic Product (GDP) for the period, equivalent to 154 billion shekels.
This announcement comes as Israel continues its military campaign in Gaza, which began in October 2023, now extending its aggression to Lebanon as of September. For comparison, the deficit for the twelve months ending in September was recorded at 8.5% of GDP, or 165.8 billion shekels ($44.8 billion).
The Research Department of the Bank of Israel anticipates a budget deficit of 7.2% of GDP for the full year 2024. The government has set its forecast slightly lower, expecting a 6.6% deficit by year’s end. This projection marks a modest reduction compared to the figures reported in recent months.
To finance wartime expenditures and cover the widening budget shortfall, Israel has repeatedly turned to international debt markets for liquidity, according to Anadolu Agency reports.
Since October 7, 2023, Israel, with unwavering support from the United States, has carried out a campaign in Gaza resulting in over 146,000 Palestinian casualties, including thousands of women and children, with over 10,000 reported missing. This violence has left Gaza in ruins, with widespread famine leading to the deaths of children and the elderly, creating one of the most severe humanitarian crises globally.
British journalist David Hearst, editor-in-chief of Middle East Eye, recently highlighted that Israel’s escalating losses in its ongoing offensives in Gaza and Lebanon reveal its inability to achieve victory in this war. Hearst argues that both Israel and the United States are under a dangerous illusion, assuming Hamas in Gaza and Hezbollah in Lebanon have been defeated. He cautions that it may take many more months of conflict before the reality sinks in: there is no going back to the pre-October 6 status quo.
