Israeli budget deficit soars due to expenses of aggression on Gaza
3 Min Read
The deficit for the previous 12 months increased from 1.5% in September to 2.6% in October as a percentage of GDP.
-
Palestinians inspect the damage of destroyed homes following Israeli strikes on Gaza on October 24, 2023. (AP)
The Israeli Finance Ministry announced on Wednesday that the occupation's budget deficit for October was 22.9 billion shekels ($6 billion), citing an increase in costs associated with financing "Israel's" war on the Gaza Strip.
The deficit for the previous 12 months increased from 1.5% in September to 2.6% in October as a percentage of GDP.
Instigated by the ongoing aggression on Gaza since October 7, revenue fell 15.2% last month due to tax deferments and lower social security income.
The occupation's deficit was 4.6 billion in September of 2022 and 3.1 billion in October of 2022.
Apart from the battlefield in Gaza, where the Israeli military is incurring significant losses in tanks and other vehicles, amounting to tens of millions of dollars, the state of the entity's economy and internal front is also experiencing substantial losses and chaos.
In a report on the dire situation facing "Israel", Yedioth Ahronoth provided an updated account on Tuesday, outlining a series of serious economic damage and risks the entity is facing, in addition to updates on the war's impact on settlers. The report also included the latest tally of Israeli casualties since October 7.
Economic impact and losses since October 7
According to the newspaper, the estimated economic growth loss for the entity due to various setbacks in tax payments is valued at 15 billion shekels in total, while Israeli foreign reserves slumped $7.3 billion in October.
Meanwhile, the Israeli economy suffered losses amounting in total to approximately 50 billion shekels (around $13 billion), divided as follows:
- Security and military expenditures totaling 30 billion shekels, primarily allocated from budgets of reservist soldiers, with an additional 14.3 billion dollars in American aid.
- Damages estimated at around 10 billion shekels have been incurred in 24 settlements near the Gaza Strip.
- 5 billion shekels in damages resulting from rocket attacks in other parts of "Israel" and a 2 billion shekel budget for housing solutions for displaced settlers in the south and north.
- The budget for what is referred to as "support aid" for October and November amounts to 12 billion shekels.
- Thousands of small businesses are on the brink of bankruptcy.
- Hundreds of thousands of Israeli employees are expected to be forced into unpaid leave.
In a recent survey conducted by the Central Bureau of Statistics in "Israel", 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 hit the hardest, with more than 70% of the surveyed companies reporting a revenue decrease of over 70%.
Small businesses were particularly hard hit, 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.
