Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Lebanese Ministry of Health: One person was killed in an Israeli airstrike on a car in the town of Burj Qalawieh, south Lebanon.
Al Mayadeen correspondent: The first ship of the Maghreb fleet delivering aid to break the siege on Gaza departs from the port of Gammarth in Tunisia.
Channel 12: Airspace closed at Ramon Airport due to fears of drone infiltration
IOF Spokesperson: Sirens sounded over an aircraft infiltration in the Bir Ora area, and details are being examined
Drone infiltration sirens sound north of the Gulf of Aqaba
Al Mayadeen's correspondent in Gaza: The Israeli occupation carried out five extremely violent raids on the western areas of Gaza City
Al Mayadeen's correspondent in Gaza: The Israeli occupation carried out major bombings in the Gaza Strip, the most violent since October 7
Yemeni Armed Forces spokesperson Brigadier General Yahya Saree: The missile force carried out a major operation using the Palestine 2 ballistic hypersonic missile, hitting several targets in occupied Yafa.
Sirens sound in large areas of occupied Palestine after a missile launch from Yemen was detected
Al Mayadeen's correspondent: 14 martyrs arrive at al-Shifa Hospital following Israeli massacre of al-Sultan Family north of Gaza.

Israeli economy strains amid war on Gaza, controversial spending

  • By Al Mayadeen English
  • Source: Bloomberg
  • 12 Nov 2023 17:02
4 Min Read

Finance Minister Bezalel Smotrich is gearing up to unveil a new budget for the remainder of 2023 and lay out plans for the following year.

  • x
  • Israeli Prime Minister Benjamin Netanyahu, right, talks with Finance Minister Bezalel Smotrich, left, during the weekly cabinet meeting in the prime minister's office in Al-Quds, June 25, 2023.(AP)
    Israeli Prime Minister Benjamin Netanyahu, right, talks with Finance Minister Bezalel Smotrich, left, during the weekly cabinet meeting in the prime minister's office in Al-Quds, June 25, 2023 (AP)

"Israel's" ongoing war on Gaza is causing the Israeli economy significant losses, estimated at about $260 million daily, Galit Altstein wrote for Bloomberg News.

Yet, it's not just the financial toll that's causing concern for Prime Minister Benjamin Netanyahu. The conflict, already devastating in terms of lives lost, is proving to be more costly than initially anticipated, straining public finances.

However, it's the controversial allocations for ultra-Orthodox schools and other favored causes championed by extremist groups in the ruling coalition that have sparked a national debate and unsettled markets.

Finance Minister Bezalel Smotrich is gearing up to unveil a new budget for the remainder of 2023 and lay out plans for the following year.

Read more: Israeli minister Smotrich admits with 'pain, bowed head': We failed

Within "Israel's" expenditure plans are discretionary spending designated for the five parties in Netanyahu's government, including a record 14 billion shekels approved for religious schools, some of which are exempt from teaching core subjects like English and math.

These funds also support projects in illegal settlements in the occupied West Bank.

Despite constituting a fraction of the overall budget, these allocations reflect conflicting priorities at a time when "Israel" is facing one of its most severe wars in decades.

Israeli coalition funds impact market perception

The utilization of coalition funds in "Israel" has significant implications for market perception, particularly amid the economic toll of the ongoing war on Gaza.

The regime's reliance on these funds could potentially increase its debt burden. Global traders' responses matter as the regime resorts to bonds for war financing, with the deficit ballooning significantly.

Related News

Famine, massacres, and relentless strikes turning Gaza to 'wasteland'

Tech staff challenge Israeli ties at Amazon, Microsoft, and Google

While Israeli assets have largely recovered, concerns persist over the regime's debt, reflected in increased bond insurance costs and a higher risk premium.

The substantial funding directed towards religious programs and settlements, criticized for potential growth suppression even before the conflict, now stands out as the regime commits to bearing the economic costs of the war.

Finance Minister Smotrich's proposed budget foresees a substantial spending increase, primarily in military expenses funded by increased debt.

Read more: War costs a lot of money that we spend every day: Netanyahu

Despite the urging of economists and analysts to reevaluate funding priorities, the regime remains firm, causing growing concern about "Israel's" economic outlook.

This comes after a brief positive economic turn last year, now facing a potentially higher deficit than previously forecasted.

What Bloomberg Economics Says

The allocation of funds holds crucial political weight for Netanyahu and his allies, as certain parties had threatened to dismantle the coalition if the spending wasn't approved in May.

Tension within the Finance Ministry is evident, creating a divide between Smotrich and a faction overseen by technocrats perceived to be less influenced by political motivations.

The Finance Ministry's budget department recommended more stringent measures to cover increased spending and reduced revenue, proposing actions such as diverting coalition funds and closing certain government ministries.

The department head cautioned Smotrich about the scrutiny of fiscal decisions by credit rating agencies.

The responsibility of crafting a new budget falls on Smotrich. While he aims for growth-oriented reforms, he also advocates for preserving funds for orthodox schools and increasing spending on settlements, which he deems essential for security amid rising tensions in the West Bank.

However, the perceived favoritism towards certain groups, especially where employment rates are low and military service exemptions are common, has drawn criticism.

Former central bank governors expressed concern, warning that a lack of significant budget adjustments might indicate weak governance and could potentially lead to a credit rating downgrade for "Israel."

Read more: Israeli central bank chief warns of economic impact of war on Gaza

  • war on Gaza
  • Israeli economy
  • Benjamin Netanyahu
  • Betzalel Smotrich
War on Gaza

War on Gaza

Most Read

The damaged building in the Katara neighborhood, Doha, Qatar, September 9, 2025 (Social media)

Hamas delegation survives Israeli assassination attempt in Qatar

  • Politics
  • 9 Sep 2025
Israeli police and rescue teams respond at the scene of a shooting attack where several people killed and injured in Jerusalem, Monday, Sept. 8, 2025 (AP)

Al-Quds shooting: 7 settlers killed, several critically injured

  • Politics
  • 8 Sep 2025
Pro-"Israel" conservative Charlie Kirk shot during Utah speech

Pro-'Israel' far-right Charlie Kirk shot dead during Utah speech

  • US & Canada
  • 11 Sep 2025
Uprising against Volker Turk at the Human Rights Council over Gaza.

Uprising against Volker Turk at the Human Rights Council over Gaza

  • Politics
  • 12 Sep 2025

Coverage

All
The Ummah's Martyrs

Read Next

All
People protest against Israeli Prime Minister Benjamin Netanyahu during the 79th session of the United Nations General Assembly, in New York, on Friday, September 27, 2024 (AP)
Politics

'Israel' stops unfunded diplomacy ahead of UN, October 7 memorial

An Israeli Air Force fighter jet releases flares over the Gaza Strip, is seen from southern occupied Palestine, Thursday, May 8, 2025 (AP)
Politics

OIC summit draft: Israeli attack on Qatar risks normalization

People shout slogans and hold Palestinian flags while protesting during the twenty-first stage of La Vuelta cycling race from Alalpardo to Madrid, Spain, Sunday, Sept. 14, 2025. (AP)
Sports

Pro-Palestine protests force abrupt end to Vuelta a España finale

Damage is seen after an Israeli strike targeted a compound that hosted Hamas' political leadership in Doha, Qatar, on Wednesday, September 10, 2025 (AP)
Politics

Israeli regime faces growing isolation over Qatar strike: Reports

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS