In 2023, the Israeli government's expenses related to the conflict with Hamas amounted to 24.7 billion shekels ($6.59 billion). These expenses were incurred between October 7, when Hamas attacked Israel, and December 31. Out of this amount, 17 billion shekels were spent on defense, with the remaining funds allocated for civilian purposes associated with the conflict. In December alone, the conflict-related expenses reached 17.2 billion shekels, contributing to a monthly total government expenditure of 71 billion shekels.
During this period, the monthly deficit was 33.8 billion shekels, reflecting an 82.7% year-on-year increase. The annual deficit for the Israeli government in 2023 was 77.5 billion shekels, equivalent to 4.2% of the GDP. This marked a significant shift from the surplus of 9.9 billion shekels recorded in 2022.
The Finance Ministry attributed this deficit to both increased spending and a decline in revenue. The conflict with Hamas led to reduced economic activities in Israel, resulting in a 6.4% decrease in government revenues compared to 2022. Concurrently, expenditures rose by 12.5% year-on-year.
The Bank of Israel estimates that the overall cost of the war will be around $58 billion, and the economy contracted by 2% in the final three months of 2023.
(With Agency Inputs)
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