The Israeli Ministry of Finance said that Israel recorded a budget deficit of 4.2% of GDP in 2023 after a surplus of 0.6% in 2022.

The Israeli Ministry’s statement today confirmed that the deficit is due to increased government spending to finance the war against Hamas in the Gaza Strip.

She added that the deficit recorded in December 2023 amounted to 33.8 billion shekels (nine billion dollars), compared to 18.5 billion shekels in the previous year.

On Sunday, Israeli Finance Minister Bezalel Smotrich said that the Council of Ministers is scheduled to approve the 2024 war budget next Thursday, after the ministers approved financial support worth nine billion shekels ($2.5 billion) for reserve soldiers.

Israel last year approved a two-year budget for 2023 and 2024, but the war with Hamas in Gaza severely damaged the government's finances, requiring budget adjustments and additional spending.

In December, the Israeli Parliament (the Knesset) approved a special war budget for 2023 worth about 30 billion shekels to help finance the war.

The Finance Ministry said the war would likely cost at least another NIS 50 billion in 2024, and would nearly triple its budget deficit to about six percent of GDP if the fighting continued into February.