Israeli war spending in Gaza, Lebanon tops $30b in 2024

JERUSALEM: Israel spent 112 billion shekels ($31 billion) on its military conflicts in Gaza and Lebanon in 2024, the Finance Ministry said in a report on Monday.

Between October 7, 2023 – when Palestinian militant group Hamas attacked Israel to trigger the war in Gaza and subsequent missile fire from Hezbollah in Lebanon – and the end of 2024 spending reached 141.6 billion shekels.

Total spending on defence in 2024 was 168.5 billion shekels, or 8.4 per cent of gross domestic product, up from 98.1 billion in 2023, when defence costs were 5.2 per cent of GDP, the report showed.

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The increase in war spending pushed the budget deficit to 6.8 per cent of GDP in 2024, a revision from a preliminary estimate of 6.9 per cent. Israel’s economy grew 0.9 per cent in 2024.

Prior to war, in May 2023, Israeli lawmakers approved a 2024 budget of 513.7 billion shekels but the fighting required three additional budgets in 2024 that raised state spending by 21 per cent to 620.6 billion shekels. Revenue last year was 484.9 billion shekels.

The deficit, which had topped 8 per cent of GDP during 2024, has since eased and stood at 5.3 per cent in February.

Due to political infighting, Israel has yet to approve a budget for 2025 and the country is using a prorated version of the base 2024 budget.

Failure for lawmakers to pass a budget by the end of March would trigger new elections. The budget draft of tax hikes and steep spending cuts will be approved on time, said Finance Minister Bezalel Smotrich.

The budget, he said, “reflects a responsible budget that will ensure stability and the continued proper functioning of the government while addressing Israel’s security needs during this period.”

Accountant General Yali Rothenberg added: “It is crucial to reduce the deficit below 5 per cent of GDP to stabilize government expenditures and the debt-to-GDP ratio.”