Israel's budget deficit rise significantly amid war on Gaza
Date
9/11/2024 8:59:53 AM
(MENAFN) Israel's budget deficit has been increasingly affected by the ongoing and severe military offensive in the Gaza Strip. This escalation has led to a gradual rise in the deficit throughout the year. By August, the deficit as a percentage of the country's GDP had reached minus 8.3 percent, up from minus 7.6 percent in June, minus 6.2 percent in March, and minus 4.1 percent in December of the previous year. This worsening trend reflects the financial strain caused by the prolonged conflict.
From January to August, the budget deficit amounted to 84 billion shekels, equivalent to approximately USD22.38 billion. This represents a stark contrast to the slight surplus of 0.3 billion shekels, or USD79.9 million, recorded in the same period last year. The sharp increase in the deficit highlights the escalating costs associated with the ongoing military operations and their impact on national finances.
The Israeli Finance Ministry's data released on Sunday shows that expenditures have surged by 31.8 percent year-on-year during the first eight months of the year, while revenues have only increased by 4 percent. This disparity between rising expenses and slow revenue growth has significantly contributed to the budget deficit. In August alone, the deficit reached 12.1 billion shekels, or USD3.22 billion, further underscoring the fiscal challenges facing the country.
The ongoing offensive on Gaza, which has been in effect since last October following an attack by Hamas, has resulted in a tragic toll of nearly 41,000 Palestinian deaths, primarily women and children, according to local health authorities. The extended conflict, which critics argue may be politically motivated to benefit Prime Minister Benjamin Netanyahu, has not only led to substantial human costs but also exerted considerable pressure on Israel's economy due to the high expenditure required for the military campaign.
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