Israel may face serious financial difficulties due to the rapid increase in military spending and the rise in long-term defense commitments. This is reported by Ynetnews, citing an analytical piece from Calcalist, which discusses the growing pressure on public finances and the risk of a significant increase in debt burden.
According to an analysis, following the events of October 7, 2023, Prime Minister Benjamin Netanyahu's government faced the necessity of a large-scale revision of its defense strategy. Authorities presented a military spending program amounting to approximately $95 billion, planned over ten years.
The report claims that the strategic directives prepared by the end of 2025 foresee an expansion of military capabilities and the procurement of additional weapon systems to prepare for various security scenarios.
According to estimates from representatives of the Ministry of Defense, the broadest implementation option for the program could cost the country nearly 800 billion shekels. As a result, after negotiations between the finance and defense ministries, a compromise plan costing around $94.5 billion was agreed upon.
Analysts warn that the implementation of these expenditures could lead to a significant increase in public debt. It is projected that by 2035, the ratio of public debt to gross domestic product could reach 83%.
Experts also note that in the case of a prolonged military conflict, the economic consequences for the country could be significantly more severe, affecting the standard of living, the labor market, and the sustainability of public finances.
