The fighting in Gaza and Lebanon were Israel’s longest wars ever [Getty/archive photo]
Israel spent 112 billion shekels ($31 billion) on its military offensives in Gaza and Lebanon in 2024, Israel’s finance ministry said in a report on Monday.
Total spending on defence in 2024 was 168.5 billion shekels, or 8.4 percent of gross domestic product, up from 98.1 billion in 2023, when defence costs were 5.2 percent of GDP, the report showed.
The increase in war spending pushed the budget deficit to 6.8 percent of GDP in 2024, a revision from a preliminary estimate of 6.9 percent. Israel’s economy grew 0.9 percent in 2024.
Before the wars, in May 2023, Israeli lawmakers approved a 2024 budget of 513.7 billion shekels but the fighting required three additional budgets in 2024 that raised state spending by 21 percent to 620.6 billion shekels. Revenue last year was 484.9 billion shekels.
The deficit, which had topped eight percent of GDP during 2024, has since eased and stood at 5.3 percent in February.
Due to political infighting, Israel has yet to approve a budget for 2025 and the country is using a prorated version of the base 2024 budget.
Failure of lawmakers to pass a budget by the end of March would trigger new elections. The budget draft of tax hikes and steep spending cuts will be approved on time, said Finance Minister Bezalel Smotrich.
“It is crucial to reduce the deficit below 5% of GDP to stabilise government expenditures and the debt-to-GDP ratio,” Accountant General Yali Rothenberg said.
Earlier reports said that the Israeli ministry had not published monthly reports on war costs since January, raising concerns over transparency in government spending.
Israel’s war on Gaza, described by many as a genocide, began on 7 October 2023 and ended in a ceasefire deal with Hamas on 19 January.
The offensive killed more than 61,700 Palestinians – mostly civilians – including more than 48,570 confirmed dead and others believed to still be beneath the rubble.
In Lebanon, Hezbollah began cross-border attacks on Israel in parallel to the war on Gaza in a “support front” to the Palestinians, but the hostilities escalated into a full-blown war in September before a ceasefire deal ended the conflict there on 27 November.
That war is said to have killed around 6,000 people in Lebanon. Israel has continued to carry out deadly attacks in both Lebanon and Gaza despite the ceasefire deals.
The war in Gaza and simultaneous fighting with Hezbollah have been the longest in Israel’s history, and have had a significant impact on its economy.
Israel’s economy is likely to remain strained in the long term, especially as military spending continues and many Israelis have not yet returned home to the north, observers say.
Tens of thousands of Galilee residents near the border with Lebanon were forced to leave their homes once clashes erupted with Hezbollah on 8 October 2023.
The Israeli government has been burdened with temporarily accommodating them in relatively safer parts of Israel.
But despite Hezbollah being battered by the war and most incapable of fighting Israel in the foreseeable future – and with a ceasefire deal that obliges it to disarm and withdraw from southern Lebanon – many north Israeli residents have refused to return home.
(Reuters, The New Arab)
