Israeli budget deficit hits $35.7B amid war on Gaza

JERUSALEM

Israel said Thursday that the budget deficit reached 7% of the GDP, hitting $35.7 billion since April 2023.

The deficit amounted to 132.2 billion shekels ($35.7 billion), an unprecedented figure since the 2008 global financial crisis, amid the ongoing war on Gaza seven months ago, the office of the general accountant of the Israeli Ministry of Finance said in a statement.

As a result, the recorded deficit exceeded the government's target for the entire year 2024, which was 6.6% of Israel's GDP.

The financial deficit reached 11.7 billion shekels ($3.16 billion) in April alone.

The deficit growth will continue in the coming months despite the better-than-expected revenues, according to the statement.

The Ministry of Finance estimates that the annual deficit will peak in September and is expected to decline to 6.6% of GDP by the end of the year.

In contrast, the statement believes that given the current rate of government spending, the picture may be more pessimistic, and the financial deficit by the end of the year may reach 8% of GDP.

Israel has pounded the Gaza Strip in retaliation for the Oct. 7, 2023 attack by Hamas which killed about 1,200 people. More than 34,900 Palestinians have since been killed in Gaza, mostly women and children, and 78,500 others injured, according to Palestinian health authorities.

Over seven months into the Israeli war, vast swathes of Gaza lay in ruins, pushing 85% of the enclave’s population into internal displacement amid a crippling blockade of food, clean water, and medicine, according to the UN.

Israel stands accused of genocide at the International Court of Justice. An interim ruling in January said it is "plausible" that Israel is committing genocide in Gaza and ordered Tel Aviv to stop such acts and take measures to guarantee that humanitarian assistance is provided to civilians in Gaza.

*Writing by Mohammad Sio in Istanbul