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
Al Mayadeen's correspondent: Israeli warplanes raided the outskirts of the town of Shmestar in Bekaa, eastern Lebanon
Donald Trump will speak with Russian leader Vladimir Putin on Thursday: White House
Al Mayadeen's correspondent in South Lebanon: Israeli warplanes raid the town of Bnaafoul, Saida district
YAF: Israeli enemy will pay for this crime.
Yemeni Armed Forces: Son of Major General Al-Ghamari martyred alongside him in Israeli aggression.
Yemeni Armed Forces: YAF mourns martyrdom of Chief of the General Staff Mohammad Abd al-Karim al-Ghamari.
Al Mayadeen's correspondent: Palestinian shot and killed by IOF east of Al-Bureij camp in the central Gaza Strip
Al Mayadeen's correspondent in South Lebanon: Occupation forces opened machine gun fire toward outskirts of Aitaroun as locals headed for olive harvest.
Al Mayadeen's correspondent in South Lebanon: Israeli drone drops bomb at outskirts of town of Blida as people head for olive harvest.
Israeli media: Rafah crossing was not opened as planned, and no date has yet been set for the resumption of movement through it.

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

Indonesia, Azerbaijan, Pakistan in talks to deploy troops to Gaza

38% of BBC viewers say corporation 'ineffective' at being independent

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

Iran strikes secret Israeli-US bunker under Tel Aviv high-rise

Tel Aviv high-rise struck by Iran hid Site 81, secret US-Israeli base

  • Politics
  • 14 Oct 2025
Palestinian journalist Saleh al-Jaafarawi in an undated image in Gaza, occupied Palestine (Social media)

Gaza Palestinian journalist Saleh al-Jafarawi killed by collaborators

  • Politics
  • 12 Oct 2025
drop site

New report details extensive Israeli arson in Gaza after ceasefire

  • Politics
  • 13 Oct 2025
Illustration of fists breaking shackles, representing the liberation of Palestinian detainees from Israeli prisons. (Illustrated by: AL Mayadeen English/Batoul Chamas)

4 prominent Palestinian detainees to be freed: Who are they?

  • Palestine
  • 13 Oct 2025

Coverage

All
War on Gaza

Read Next

All
A person shops at a grocery store in Schaumburg, Ill., Thursday, September 18, 2025. (AP Photo/Nam Y. Huh)
Economy

75% of Americans report higher costs despite Trump’s inflation claim

With the government shutdown now in its third week, a sign turns away tourists at the entrance to the Capitol Visitor Center, in Washington, Wednesday, October 15, 2025. (AP Photo/J. Scott Applewhite)
Politics

US judge blocks shutdown layoffs amid Trump threats to cut jobs

Bill Ackman speaks about higher education and Harvard University at the twenty-eighth annual Milken Institute Global Conference at the Beverly Hilton in Beverly Hills, California, on May 6, 2025. (Patrick T. Fallon / AFP via Getty Images)
Politics

Bill Ackman donates $1 mln to anti-Mamdani PAC in NYC mayoral race

Members of the Pentagon press corp carry their belongings out of the Pentagon after turning in their press credentials, on October 15, 2025 in Washington. (AP Photo/Kevin Wolf)
US & Canada

Pentagon journalists vacate workspaces as new restrictions take effect

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