As Israel's parliamentary election campaign heats up, politicians are focusing on military strength against regional threats. They are largely ignoring the country's rising debt. The election, set for October, has candidates emphasizing perceived dangers rather than the financial costs of ongoing conflicts, according to reports from Al Jazeera.
Key Details
Israel's central bank estimates that from 2023 to 2026, 350 billion shekels ($118 billion) will be spent on wars in Gaza, Lebanon, and Syria. This figure does not include the ongoing conflict with Iran that began in February 2026. The Finance Ministry reported an additional 35 billion shekels ($11.8 billion) allocated to the Iran conflict alone. Defence spending is projected to reach 249 billion shekels ($84 billion). This is expected to increase its share of the economy from 5.2% of gross domestic product (GDP) in 2023 to over 8% in 2024.
Background
The national debt has surged to about 1.4 trillion shekels ($480 billion). This is up from 1.07 trillion shekels ($365 billion) before October 2023. Yossi Mekelberg, an Associate Fellow at Chatham House, noted, "Unfortunately, there just isn’t any electoral benefit in talking about the economy. Instead, politicians assume voters are just far more interested in hearing the typical jingoism and deliver that."
The rising national debt and increased defence spending could affect Israel's credit ratings and investor confidence. This is especially true for government bonds. Investors may closely watch how these financial pressures influence future economic policies and electoral outcomes. Upcoming economic reports may provide insight into the implications of this debt on Israel's fiscal health.
Based on reporting by: aljazeera.com