Israel's Budget Deficit Expected to Rise to 6.6% in 2024

A revised draft of Israel's 2024 budget shows that the budget deficit is expected to increase from 2.25% to 6.6% of GDP during the current year. Ministers in the government will begin discussions later today, Sunday, on an amended budget that will include significant spending to finance Israel's war with the Islamic Resistance Movement "Hamas." A vote on this budget is expected to take place tomorrow morning, Monday. According to the budget draft, the war with Hamas, which began on October 7, is anticipated to reduce economic growth for the current year by 1.1 percentage points, following an expected decline of 1.4 percentage points last year. The financial impact of the war is estimated to be around 150 billion shekels ($40.25 billion) for the period of 2023-2024, assuming that intense fighting concludes in the first quarter of the year.