Budget Deficit Raises Possibility of Early Elections in the Occupied Territories
The English section of webangah News Agency, citing Mehr news Agency via Al Jazeera, reports that amid two years of continued war in Gaza, Israel is facing a deepening economic crisis. The Knesset has approved raising the targeted budget deficit ceiling to 5.2% of GDP for 2025.
Reuters reported that this decision stems from a need to secure additional funding for military expenses amounting to 31 billion shekels (9.35 billion USD).
According to israeli newspaper Calcalist, out of this sum, 29 billion shekels (8.75 billion USD) will be allocated directly to security sectors while civilian programs are under severe financial strain.
The Bank of Israel further noted that in the second quarter of 2025, Israel’s economy contracted by 4% year-on-year, reflecting sustained pressures from the ongoing conflict.
Calcalist also predicted that due to these challenges, Israel’s 2026 budget may not be approved by December 31st. This delay raises concerns about potential cabinet dissolution if approval does not occur by March-end, potentially paving the way for early elections as soon as June.
