Smotrich says Israel’s economy can withstand war

Finance Minister Bezalel Smotrich says that Israel has a good and functioning government and an economy that will be able to support the war effort in a generous but responsible manner.

“The Israeli economy entered this war in a relatively strong position and we will maintain a reasonable deficit even during the war,” Smotrich says at press conference. “We estimate that we will end 2023 with a one-time war deficit of no more than 3.5% to 4% of GDP.”

“We are working on building a new budget for 2024 and we will introduce a series of structural reforms that support growth,” he says.

For 2024, Smotrich says he is committed to not break through a 5% deficit ceiling.

Meanwhile, Yogev Gradus, director general of Finance Ministry’s budget department, warns that the economic repercussions of the war are “dramatic.”

Gradus says that the costs of the war so far for the defense system are estimated at more than NIS 20 billion. The estimated monthly damage to GDP is equivalent to more than 0.5% of the economy’s annual GDP.