Israel's budget deficit widens further as conflict costs strain finances-Xinhua

Israel's budget deficit widens further as conflict costs strain finances

Source: Xinhua

Editor: huaxia

2024-07-08 21:36:15

JERUSALEM, July 8 (Xinhua) -- Israel's annualized budget deficit ballooned to 7.6 percent of the country's gross domestic products (GDP), or 146 billion shekels (around 39.6 billion U.S. dollars), at the end of June, according to preliminary data released by the Finance Ministry on Monday.

This marks the highest deficit-to-GDP ratio since August 2021.

The surge is attributed to the government's mounting expenses for the ongoing conflicts with Hamas and Hezbollah. By the end of June, total war expenses reached 80.5 billion shekels (about 21.8 billion dollars), representing a significant monthly increase of 10.8 billion shekels compared to May.

Ammunition, fuel, equipment, maintenance, and payments to soldiers, displaced residents, and affected businesses are driving the main conflict expenses.

Overall government spending has risen sharply in 2024, reaching 300.3 billion shekels by June, a 34.2 percent year-on-year increase. Meanwhile, revenues grew by a modest 3.3 percent to 238 billion shekels.

This widening gap marks the third consecutive month where the deficit has exceeded the government's target of 6.6 percent of GDP for 2024. In comparison, Israel closed 2023 with a deficit of 4.2 percent.