According to figures released by the Bank of Israel and the Israeli Ministry of Finance, the cost of the first six months of the war, which Netanyahu has said will continue for months and shows every sign of escalating into an all-out war against Hezbollah in the north and the Houthis in the Red Sea, despite fears of military overstretch, had reached more than 70 billion shekels ($73 billion) by the end of March. This prompted the Knesset to increase the 2024 budget by $73 billion, with most going to finance the military and the rest to civilian wartime needs, compared with the original budget approved in May 2023, leading to a likely deficit equal to 8 percent of GDP, breaching the 6.6 percent target ceiling the government set for 2024.
This will mean a massive hike in taxes and drastic cuts to public services to at least partially cover the rising deficit. But public services, underfunded for years, are now at breaking point, with infrastructure, education, welfare, health care and other public services on the verge of collapse. According to a study by the Arlozorov Forum, Israeli government civilian spending would have to increase by 171 billion shekels ($47 billion) just to reach the OECD average level of expenditure.
Yes