Israel’s fiscal deficit climbs to 7.6% of GDP, above 2024 target for 3rd month in a row

Israel’s fiscal deficit swelled to 7.6 percent of gross domestic product (GDP), or NIS 14.6 billion ($3.96 billion), in June over the prior 12 months, as the government continues to pour billions of shekels into funding the months-long war with Hamas and the lower-scale conflict with Hezbollah, according to preliminary figures released by the Finance Ministry.

It marks the third month that the deficit is above the government target of 6.6% of national output set for 2024. Israel posted a budget deficit of 4.2% in 2023.

The June deficit widened from 7.2% of GDP in May, 7% in April, and 6.2% in March, amid increased military and civilian spending.

In June, government expenditure amounted to NIS 51.2 billion, taking spending since the start of the year to NIS 300.3 billion, an accumulative increase of 34% compared with the same period in 2023. War costs since the outbreak of the fighting triggered by the October 7 Hamas onslaught ballooned to NIS 80.5 billion.