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
Sayyed Ali Khamenei: The model Trump is presenting to Arab countries is absolutely a failed one
The leader of the Islamic Revolution and the Islamic Republic of Iran Sayyed Ali Khamenei: Trump's remarks source of shame, embarrassment for him, Americans
Al-Zaidi to Al Mayadeen: There is a pressing need to restructure the regional landscape, a challenge facing the Baghdad Summit, and we hope it will succeed in doing so
Al-Zaidi to Al Mayadeen: Among the urgent issues on the summit’s agenda are ending the war in Palestine and addressing the complex situation in Syria
Al-Zaidi to Al Mayadeen: We hope the summit will yield reasoned solutions that serve the interests of regional stability
Al-Zaidi to Al Mayadeen: We hope that the summit will be an opportunity to achieve the long-awaited breakthrough in all regional issues
Iraqi presidential spokesperson Abdullah al-Zaidi to Al Mayadeen: The significance of the summit stems from the critical timing under which it is being convened
Yemeni Ministry of Health: The Zionist aggression on the ports of Hodeidah and Salif in western Yemen has killed one and injured 11
Yemenia Airways flights to and from Sanaa International Airport resumed, following the return of 134 passengers from Queen Alia Airport in Jordan
Russia's Putin invites league of Arab states, secretary general to take part in 1st Russian-Arab summit in October: Kremlin

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

Israeli media: Yemen may push 'Israel' towards ceasefire in Gaza

'We are by your side', Yemen's million-man rallies tell Gaza

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

Most Read

Two F-35 jets arrive at it's new operational base Wednesday, Sept. 2, 2015, at Hill Air Force Base, in northern Utah. (AP)

F-35 near-misses over Yemen signal new risks for 'Israel': Forbes

  • Politics
  • 14 May 2025
Palestinians pray over bodies of people killed in the Israeli bombardment who were brought from the Shifa hospital before burying them in a mass grave in the town of Khan Younis, southern Gaza Strip, Wednesday, Nov. 22, 2023. (AP )

Gaza casualty figures mask a much bigger horror, new study shows

  • Politics
  • 11 May 2025
Gaza and the logic of necropolitics: Sovereignty measured by killing

Gaza and the logic of necropolitics: Sovereignty measured by killing

  • Politics
  • 15 May 2025
Abu Obaida

Abu Obeida posts shortly after Israeli reports about his assassination

  • Palestine
  • 15 May 2025

Coverage

All
Gaza prevails against genocide

Read Next

All
Israeli media: Yemen may push 'Israel' towards ceasefire in Gaza
MENA

Israeli media: Yemen may push 'Israel' towards ceasefire in Gaza

Palestinians struggle to get donated food at a community kitchen in Khan Younis, Gaza Strip, Friday, May 16, 2025 (AP)
Politics

Trump administration planning to send 1 million Palestinians to Libya

President Donald Trump greets Israeli Prime Minister Benjamin Netanyahu at the White House, Monday, April 7, 2025, in Washington. (AP)
Politics

'Israel' concerned, says US withholding info about indirect Iran talks

Israeli Prime Minister Benjamin Netanyahu during the annual ceremony at the Yad LaBanim Memorial in occupied al-Quds on Tuesday, April 29, 2025 (AP)
Politics

Netanyahu cancels Vatican visit over fears of ICC arrest

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