The deficit in Israel’s state budget has risen to a whopping 8.3 percent, according to a report published Monday by the Accountant General at the Finance Ministry.
The monthly deficit for August stands at NIS 12.1 billion, as compared to NIS 5.7 billion a year ago in the same period.
The cumulative 12-month deficit has reached NIS 161.4 billion — the highest since March 2021, when the figure stood at NIS 169.4 billion.
The financial toll imposed by the current Iron Swords War — the longest war in Israel’s history since the founding of the state — has prompted Finance Minister Bezalel Smotrich to recommend an increase in the deficit to pay for war expenses.
The budget deficit was submitted by Smotrich and passed its first reading in the Knesset Plenum on Monday, with 58 MKS supporting the measure and 52 opposed.
The measure now returns to committee for tweaking before being presented to the plenum for its second and third (final) readings.
In his remarks prior to the vote, Smotrich urged the lawmakers to support the increase. “This needs to get done,” he told the Knesset, emphasizing that the increase, intended to help evacuees and reservists, was “localized and limited.”
The proposal to increase the deficit by NIS 3.357 billion includes the costs of assistance to IDF reservists, many of whom have been unable to return to their jobs due to continued service since the start of the war on October 7, 2023.
The costs of evacuating Israeli communities along the conflict lines — a total of more than 80,000 Israelis on the southern and northern borders who were forced to leave their homes for their own safety at the start of the war — is also included, as are the costs of escorting and aiding hostages abducted by Hamas and who have since been freed.
“The deficit will return to the target we set,” Smotrich pledged.
