Israel was forced to increase military spending by billions of shekels to cover the costs of the war, which led to the deployment of thousands of soldiers in Gaza And Lebanon, while much of the economy has slowed down severely due to a shortage of workers.
This week, the Finance Ministry lowered its 2024 growth forecast for the second time this year to just 0.4 percent from a previous estimate of 1.1 percent.
The basic pillars of the Israeli economy, including technology, construction and agriculture, were severely damaged due to the costs of fighting, the presence of tens of thousands of reserve soldiers on the front lines, and the exclusion of thousands of Palestinian workers from employment. Israel For security reasons.
Finance Minister Bezalel Smotrich said in a statement: “The main goal in the 2025 budget is to preserve the state’s security and achieve victory on all fronts, while preserving the strength of the Israeli economy.”
In total, the budget includes a package of tax increases and spending cuts worth approximately 40 billion shekels, in an attempt to rein in the budget deficit, which has now reached 8.5 percent of gross domestic product.
Total spending amounted to 744 billion shekels ($199.23 billion), of which 161 billion shekels will go to debt service.
The Prime Minister said Benjamin Netanyahu Defense allocations may increase further, either by adding funds to the budget before its approval in Parliament in January, or through a supplementary budget.
The three major credit rating agencies lowered their ratings for Israel this year due to fears that the war might continue until next year.