War on Gaza to cost Israel another $14B in 2024, 'near-tripling' deficit

Israel's war on Gaza will likely cost it at least another $14 billion (50 billion shekels) in 2024 and result in a near-tripling of its budget deficit, the Finance Ministry said, projecting that fighting will last through February.

Briefing lawmakers, the ministry's deputy budget commissioner Itai Temkin said on Monday the war was expected to stretch at least two months into 2024, adding $8.3 billion (30 billion shekels) for security and another $5.5 billion (20 billion shekels) for civilian and other expenses.

That, he told the Knesset Finance Committee, would drive up total defence spending by more than $13.2 billion (48 billion shekels) beyond what had initially been allocated.

Total budgetary spending in 2024 would rise to $155.5 billion (562.1 billion shekels) from a planned $142.1 billion (513.7 billion shekels ) and lead to a budget deficit of 5.9 percent of gross domestic product, up from a target of 2.25 percent.

With the deficit expected to widen by $20.7 billion to $31.5 billion next year, Temkin said the gap would require cutting other expenses or raising revenue.

He also it was not currently possible to plan for the possibility that the war on Gaza would stretch into March or beyond.

"It is possible that later in the year we will have to come and update it and we will have to come with updates as the war drags on," he said.