Netanyahu says "the war in Gaza is far from over", Israeli Finance Ministry foresees budget increase for next year due to defense spending

Israeli Prime Minister Benjamin Netanyahu visited Gaza and said that he plans to intensify hostilities in the coming days. Netanyahu made this statement at a meeting of the Likud faction in the Knesset. This was reported by a number of Israeli publications, UNN reports.

We are not stopping, we are continuing the fight and intensifying the fighting in the coming days, and it will be a long battle, and it is not close to over. We need patience, unity and adherence to our mission.

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Israel's war with Hamas in Gaza is likely to cost it at least another 50 billion shekels ($14 billion) in 2024 and will lead to a near tripling of its budget deficit. This forecast was made by the Israeli Ministry of Finance on Monday.  They also noted that the forecast was made taking into account that the fighting will continue until February.

According to the Israeli media, Itai Temkin, the deputy budget commissioner of the ministry, addressed the legislators during the briefing. In particular, he said that the war would last at least two months until 2024. This means adding 30 billion shekels for security and another 20 billion for civilian and other expenses. All this will increase the total defense spending by more than 48 billion shekels over what was previously allocated.

He also could not have foreseen the possibility that the war against the Palestinian Islamists Hamas in the Gaza Strip would last until March or beyond.

It is possible that later this year we will have to come back and update it, and we will have to make corrections as the war drags on. 

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The Israeli parliament this month approved a special military budget for 2023 of nearly 30 billion shekels to help finance the war and compensate those affected by Hamas' cross-border attacks on October 7. October, which led to the war, and rockets launched from Gaza and Lebanon.

Moshe Gafni, chairman of the Finance Committee, said he opposes raising income taxes but supports taxes on excess profits of banks and measures to promote economic growth.

Later, Finance Minister Bezalel Smotrich told reporters that he would work to avoid increasing the the financial burden on citizens during the war, and his top priority for 2024 is to help reservists and their families.

At the same time, the Ministry estimated that the economy fell by 19% year-on-year in the fourth quarter. compared to the third quarter, when the economy grew by 2.5%. Annual inflation is expected to reach 3.1% at the end of the year and decline to 2.1%. 3.1% at the end of the year and decline to 2.6% next year.