On Monday, Bloomberg reported that "Israel" is expected to increase its military spending by more than $8 billion next year, a move attributed to the ongoing war on Gaza.

According to the Israeli Finance Ministry, the overall budget for 2024 is expected to reach 562 billion shekels ($155 billion), which represents an increase compared to the previously approved spending plan of 513 billion shekels. This budgetary adjustment likely reflects the heightened military spending attributed to the ongoing war dynamics in the region. 

Future of the Israeli economy 

The Israeli security budget is set to increase by a minimum of $8.3 billion in the upcoming year. The projections underscore the substantial cost of the ongoing war on Gaza, incurring a daily expense of at least $269 million. Moody’s recent estimates suggest that this war will have a more pronounced impact on the economy in comparison to previous wars.

In addition to the augmented military budget, an extra $2.77 billion will be required to address various aspects. This includes covering the evacuation of approximately 120,000 individuals from the occupied northern and southern border territories, allocating additional funds to police and other security services, and financing the reconstruction of settlements damaged after the launch of Operation Al-Aqsa Flood. 

The economic impact of the war encompasses expenditures on hundreds of thousands of reservists, whom the Israeli occupation army has activated for the ongoing war on Gaza, as reported by the outlet, citing information from the ministry.

On that note, the Israeli occupation is “using huge numbers of costly missiles for its airstrikes in Gaza and to intercept rockets and drones fired into Israeli territory,” Bloomberg noted. Meanwhile, the occupation government's revenues are expected to slump by $9.7 billion due to shrinking corporate and real estate taxes and plummeting private consumption.

Israeli war budget falls $20bln short

The Israeli Finance Ministry recently recommended the closing of 10 government ministries to cover the huge bill it has incurred, as a result of its brutal aggression on the Gaza Strip.

The list includes the "Heritage" Ministry headed by extremist Amihai Eliyahu, who had previously advocated for nuclear attacks on the Gaza Strip and later called for its reoccupation.

A report by Israeli Channel 12 said the following ministries have been suggested for closure: "The Heritage Ministry, the Settlements and National Missions Ministry, the Jerusalem and Jewish Tradition Ministry, the Intelligence Ministry, the Ministry for the Development of the Negev and the Galilee, the Regional Cooperation Ministry,  the Diaspora Affairs and Social Equality Ministry, the Strategic Affairs Ministry, and the Advancement of the Status of Women Ministry."

Interestingly, the Finance Ministry, headed by Bezalel Smotrich, has also recommended austerity measures, including the cutting of 5 billion shekel, or around $1.4 billion, in funds allocated for Israeli political parties' demands. 

The Ministry suggested canceling subsidies on gasoline, increasing taxes on cigarettes, and reducing benefits in advanced study scholarships.

Among the strategies recommended by the Ministry, to make up for a 70 billion Shekel deficit (around $20 billion) is an increased VAT tax attached to almost all consumer goods, which currently stands at 17%, according to The Times of Israel.