Israel’s budget deficit hits record high of $39.5 billion over past 12 months

Israel’s budget deficit rose 7.6 percent of GDP over the past 12 months to 146 billion shekels (about $39.5 billion), the highest level in two decades.

Ynet reported on Monday, citing an Israeli Finance Ministry report, that the deficit is growing as the costly war in the Gaza Strip continues.

The financial report attributes this record deficit in the state budget to “high expenditures due to the ongoing war, payments to residents evacuated from contact zones, and compensation for closed businesses.”

The Israeli Finance Ministry expects the deficit to continue growing at least until the end of the third quarter of this year, after which it is expected to decline.

According to the report, government spending in June last year was 51.2 billion shekels ($13.8 billion), up 30.9 percent from the same period a year earlier (June).

The report concluded that total government spending since the start of the year is 300.3 billion shekels ($81.3 billion), up from 223.7 billion shekels ($60.6 billion) for the same period in 2023.

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