Israel’s debt increased due to war in Gaza

Tel Aviv [Israel]: The Accountant General of the Ministry of Finance published a first estimate of the debt-to-GDP ratio in Israel for 2023.

The rate of public debt in relation to GDP for 2023 in Israel increased by 1.6 per cent points and amounted to 62.1 per cent compared to 60.5 per cent in 2022. The rate of government debt in relation to GDP also increased by 1.6 per cent points and amounted to 60.4 per cent compared to 58.8 per cent in 2022.

The increase in the debt-to-GDP ratio was expected due to the government’s increased spending to finance the ongoing war in Gaza, which also caused an increase in civilian expenses and a decrease in state revenues, which caused the year 2023 to end with a budget deficit of 4.2 per cent of GDP.

The government debt for 2023 amounted to approximately 1.127.Billion Shekels (USD 310 million) compared to approximately 1.037 billion Shekels (USD 280 million) in 2022. The increase in the government debt resulted from a net positive raising of approximately 55 billion Shekels (USD 15 billion) (of which approximately 48 billion Shekels were raised in the months of October-December 2023) and market effects on the debt stock (inflation, interest and exchange rate) which amounted to approximately 35 billion Shekels (USD 9.4 billion).