Israel's budget deficit nears $21 billion due to ongoing war against Gaza

By Anadolu staff

JERUSALEM (AA) - Israel registered a gross domestic product budget deficit of 4.2% for 2023, equaling $20.7 billion, contrary to 2022 which saw a surplus of 0.6%, according to Israeli public broadcaster, KAN.

The deficit jumped 0.8% in December to 4.2%, said KAN.

It added that data from the Finance Ministry showed Israel spent $6.6 billion in 2023 on its war against the Gaza Strip.

KAN noted that tax revenues in 2023 was $30 billion lower than projected.

As for inflation, Israel put the inflation percentage between 1% and 3%, but it exceeded that figure to nearly 5.3% in 2022, it said.

Bank of Israel Governor Amir Yaron urged the government on Wednesday to stick to fiscal discipline and reduce spending in non-essential areas while raising some taxes.

Israel fears that the ongoing war, along with insecurity in the Red Sea about Israel's shipments, would increase the burden on its economy and negatively affect prices for Israeli consumers.

*Writing by Ahmed Asmar​​​​​​​