'Israel's' budget deficit surges amid the aggression on Gaza
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"Israel" reports a budget deficit of 16.6 billion shekels ($4.5 billion) for November, according to the Finance Ministry.
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Israeli Prime Minister Naftali Bennett speaks during a press conference on economic issues, in occupied al-Quds, Tuesday, July 6, 2021 (AP)
"Israel" reported a budget deficit of 16.6 billion shekels ($4.5 billion) for November, according to the Finance Ministry. The surge in expenses attributed to funding "Israel's" war on Gaza played a pivotal role in this fiscal setback.
The deficit, as a percentage of GDP, rose to 3.4% in November, reaching 62.3 billion shekels over the previous 12 months, compared to 2.6% in October, as per Reuters.
A source within the Finance Ministry indicated that the projected deficit for 2023 is expected to conclude at approximately 4% of GDP, surpassing the targeted 0.9% set at 16.9 billion shekels in the budget approved by lawmakers in May.
The Ministry highlighted a 15.6% decrease in revenue last month, partly attributed to tax deferments resulting from the war that commenced on October 7. November's revenue hit 30.3 billion shekels, marking the lowest monthly level of the year. Cumulatively, revenue for the first 11 months of the year reached 401.5 billion shekels, representing a 6.2% decline from the same period in the previous year.
In the broader context, the ongoing aggression is anticipated to impact growth in 2023 and 2024. Both the Ministry and the Central Bank project growth at 2% for this year and 1.6% and 2%, respectively, for 2024.
Expenses surged to nearly 47 billion shekels, with approximately 6 billion attributed to the war. This contributed to an 11.5% increase in January-November spending, totaling 445.3 billion shekels.
Comparatively, "Israel's" deficit was 22.9 billion shekels in October and 1.7 billion shekels in November 2022.
In a recent development, parliament preliminarily approved a war budget last week, proposing an additional 30 billion shekels for war-related spending in the remainder of 2023. However, final approval for the plan is still pending.
Read more: War costs a lot of money that we spend every day: Netanyahu
'Israel' witnesses economic regression
Last week, Bloomberg reported that "Israel's" entry into the wartime economy has left businessmen struggling to sustain their economic activities. The news agency reported that Israeli companies are facing shortages across the board due to the deployment of about 300,000 people, or 8% of the workforce, for military service.
The collapse of budgetary spending due to the war has severely impacted entertainment companies, and mass evacuations from war-affected areas in northern and southern occupied Palestine have increased economic disruptions.
The report stated that 57,000 Israeli companies will close their doors this year, compared to 42,000 companies in 2022, due to the damage caused by rising rates, inflation, and months of political unrest resulting from judicial amendments and protests, according to a survey conducted by "Coface BDI" for the Israeli business daily The Marker.
In a survey conducted by the Central Bureau of Statistics in "Israel", which was released in October, it was found that around 50% of Israeli companies experienced a significant drop in their revenues amid the aggression on Gaza. Notably, the construction and food services sectors were the hardest hit, with more than 70% of the surveyed companies reporting a revenue decrease of over 70%.
Small businesses were particularly hit hard, and "Israel" faced a shortage of workers as hundreds of thousands of Israelis were called up for reserve military service. About 11% of companies stated that 21% of their workforce had been called up for military service.
• 76% fall in tourism to Israel.
— Tory Fibs (@ToryFibs) December 7, 2023
• 80% fall in flight activity at Tel Aviv airport.
• 950,000 jobs lost in Israeli economy.
Israel is now a pariah state.
Read more: S&P downgrades 'Israel's' rating to negative citing 'war risks'
