The ministry, in a document presented to parliament on Monday, said the overall 2024 budget will probably have to total 562 billion shekels (US$155 billion), compared to 513 billion when the spending plan was first approved last May.
As well as the military spending, the ministry said an additional 10 billion shekels (US$2.8 billion) will be required to cover the evacuation of around 120,000 people from Israel’s northern and southern border areas, higher budgets for police and other security services, and the reconstruction of settlements destroyed during Hamas’s attack on October 7.
Hamas rejects proposal to give up power in Gaza in exchange for ceasefire
Hamas rejects proposal to give up power in Gaza in exchange for ceasefire
The ministry said the extra funding will be needed regardless of additional aid from the US. It added that 4 billion shekels more are needed for larger debt costs.
Minister of Strategic Affairs Ron Dermer, considered a confidant of Netanyahu, is expected in Washington on Tuesday for talks with White House and State Department officials about Israel’s plans for eventually scaling down the war, Axios reported, citing Israeli and US officials it did not name.
Government revenues are expected to drop by 35 billion shekels due to lower corporate and real estate taxes, as well as a slowdown in private consumption.
If no changes are made to planned taxation, the fiscal deficit would balloon to close to 6 per cent of gross domestic product, well beyond the 2.25 per cent ceiling set by law, the document said.
The government is set to discuss possible fiscal changes and an increase in the deficit ceiling, which the finance ministry recommends should not exceed 4.5 per cent to 5 per cent of GDP in 2024.
Hamas, designated a terrorist organisation by the US and European Union, killed around 1,200 people and abducted 240 with its attack. More than 20,000 people have since died in Gaza, according to the health ministry in the Hamas-run Palestinian enclave.