Israel’s budget deficit to reach $37.5 billion in 2024
The Israeli Ministry of Finance said on Monday that the state budget deficit in 2024 amounted to 6.9 percent of the gross domestic product, or 136.2 billion shekels ($37.5 billion).
This came in a statement issued by the Ministry of Finance today, at a time when its previous forecast for the deficit at the beginning of last year was 6.6% of the gross domestic product, before raising the forecast to 7.7% by the end of 2024.
The Israeli Ministry of Finance stated that the deficit in the general budget during the twelve months until the end of December 2024 amounted to 6.9% of the gross domestic product, or 136.2 billion shekels.
It added that after more than a year of war on several fronts, and the mass evacuation of the population, the financial deficit reached its highest level in a calendar year since the Covid-19 pandemic in 2020, when the deficit exceeded $45 billion that year.
Until the outbreak of war in October 2023, the fiscal deficit had been widening moderately, still below 1.5% of GDP.
But immediate war spending, the massive mobilization of reserves, and assistance to displaced Israeli settlers fleeing the Gaza border have widened the fiscal deficit to 4.2% for the whole of 2023.
While the Finance Ministry has tried to mitigate the deficit figures by factoring in pledged support from the United States, the latter hasn’t fully honored its nearly $18 billion in military aid.
Israel ran a budget surplus in 2022 of 0.6% of GDP, driven by stable military spending, higher foreign investment, and improved tax collections.
