In November, Israel recorded a significant budget deficit of 16.6 billion shekels ($4.5 billion), a direct consequence of the ongoing war with Hamas militants in Gaza, the Finance Ministry reported. This escalation, which began on October 7, has not only necessitated increased defense spending but has also impacted the nation’s financial health.
The deficit, representing 3.4% of Israel's GDP, marks a notable increase from October’s 2.6%. For 2023, projections suggest the deficit could reach around 4% of GDP. This rise reflects the unavoidable fiscal burden of ensuring national security during prolonged conflicts.
Israel budget deficit spikes in November due to Gaza offensive
— Dawn.com (@dawn_com) December 10, 2023
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Tax revenues in November saw a decline of 15.6%, partly attributed to tax deferments linked to the war. In comparison, the deficit in October was 22.9 billion shekels, demonstrating the fluctuating nature of wartime economies. This figure stood at a much lower 1.7 billion shekels in November of the previous year.
In a significant show of support, the Biden Administration has bolstered Israel's defense capabilities. A recent approval for a $106.5 million sale of tank ammunition, bypassing the usual Congressional review, underscores America's commitment to Israel's defense needs. The sale includes 13,981 120mm M830A1 High Explosive Anti-Tank Multi-Purpose with Tracer (MPAT) tank cartridges, among other military equipment and support services.
The Biden administration circumvented Congressional review to push through a sale of 13,000 rounds of tank ammunition to Israel. Antony Blinken informed Congress on Friday that “an emergency exists that requires the immediate sale.” https://t.co/gWUePhw7u6
— jeremy scahill (@jeremyscahill) December 9, 2023
Secretary of State Antony Blinken emphasized this move as essential for U.S. national security interests, reflecting a mutual commitment to maintaining regional stability. This support is crucial for Israel, enhancing its deterrence capabilities and homeland defense without significantly shifting the military balance in the region.
Amidst these developments, Israel's workforce, with many in uniform, has shown remarkable resilience. Rafael Advanced Defense Systems, a key player in Israel's defense sector, plans to hire 2,000 new employees, responding to a surge in applications from individuals eager to contribute to the war effort. This influx includes former startup CEOs, retirees, and even those currently serving in the military, highlighting a collective commitment to national defense. Sagit Sela Gal, Rafael's Executive VP of Human Resources, notes the company’s pivotal role in developing critical defense systems like Iron Dome, Trophy, and David’s Sling.
THE IRON DOME is an Israeli mobile all-weather air defense system developed by Rafael Advanced Defense Systems and Israel Aerospace Industries. The system is designed to intercept and destroy short-range rockets.#Lexanofficial pic.twitter.com/klQ5Eb1hPJ
— Lexanofficial 👨‍💻 (@Lexanofficial) December 10, 2023
In summary, while the conflict in Gaza presents significant financial challenges for Israel, the nation's economic resilience is evident. Support from allies like the United States, coupled with a united workforce, underscores Israel's steadfast approach to maintaining security and stability during these challenging times.
