Israel increases 2024 budget by USD923M amid current war
Date
8/26/2024 7:30:16 AM
(MENAFN) Israel's Finance Ministry has announced a substantial increase of 3.4 billion shekels (approximately USD923 million) to the state budget for 2024, aimed at supporting evacuees and addressing the economic fallout from the ongoing conflict. This decision, approved by the cabinet, is intended to provide financial aid for those displaced by the recent war with Hamas, particularly benefiting individuals in northern Israel and adjacent areas near the Gaza Strip, which the Israeli government designates as "conflict areas." The budget boost also includes a significant allocation of NIS 525 million recovered from previous cuts, along with NIS 200 million earmarked for bolstering the army's reserve forces.
The conflict, which has seen daily rocket attacks by Hezbollah and ongoing hostilities with Hamas since October 7, has severely impacted various sectors of Israel's economy. The tourism industry is particularly hard hit, with many businesses in Jerusalem’s Old City and Haifa’s flea market struggling amid a lack of visitors. Airlines have canceled flights, businesses have been disrupted, and luxury hotels face low occupancy rates. Nearly 11 months into the war, the economic strain is evident as the conflict persists with no clear resolution in sight.
Prime Minister Benjamin Netanyahu has attempted to reassure the public by asserting that the economic damage is temporary. However, the prolonged and destructive nature of the conflict has taken a toll on small businesses and eroded confidence in Israel's economy, once renowned for its robust entrepreneurial spirit. Karnit Flug, a former Bank of Israel governor and current deputy head of research at the Israel Democracy Institute, highlights the prevailing uncertainty, stressing that the economy's future hinges on the duration and intensity of the war, as well as the potential for further escalation.
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