Israel's 12-month budget deficit swells to $44b due to conflict

Israel's 12-month budget deficit surged to 8.5 percent of the country's GDP by the end of September, amounting to 165.8 billion shekels (around 44 billion U.S. dollars), according to figures issued by the Israeli Finance Ministry on Thursday, reported Xinhua.

The increase in the deficit is primarily attributed to the expenses of the ongoing conflict with Hamas and Hezbollah, the report said. By the end of September, Israel's total expenditures for the fighting had reached 103.4 billion shekels, marking a significant rise of 6.5 billion shekels from the end of August.

Israel's government spending has sharply risen in 2024, totaling 450.1 billion shekels at the end of September, a 31.2 percent increase from the January-September period last year.

This expanding deficit has now exceeded the government's 6.6 percent GDP target for six consecutive months, compared to an annual 4.2 percent deficit recorded at the end of 2023.

The latest 8.5-percent figure is also above the central bank's latest forecast of 7.2 percent of GDP for 2024.

Revenue for the Israeli government from the beginning of the year rose by 5.4 percent year-on-year to 357.3 billion shekels.