Israel Cabinet slated to vote on 2024 war budget this week: Finance Minister

JERUSALEM – Israel’s Cabinet is set to approve a 2024 wartime budget on Jan 11, Finance Minister Bezalel Smotrich said on Jan 7, after ministers approved nine billion shekels (S$3.2 billion) in financial support for military reservists.

“The state of Israel puts the reservists and their families at the centre, and this is the anchor of the budget for 2024 that we will deliver this weekend,” Mr Smotrich said in a joint statement with Prime Minister Benjamin Netanyahu and Defence Minister Yoav Gallant.

Israel in 2023 approved a two-year budget for 2023 and 2024, but

the war against Hamas in Gaza

has shaken government finances, requiring budget changes and additional spending.

In December, Parliament approved a special budget for 2023 of nearly 30 billion shekels to help fund the war and compensate those impacted by Hamas’ Oct 7 attacks that sparked the conflict.

Mr Smotrich’s spokesman clarified that the budget vote would most likely take place on Jan 11, but offered no further details.

The Finance Ministry has said the war

would most likely cost at least another 50 billion shekels in 2024

and result in a near-tripling of its budget deficit to around 6 per cent of gross domestic product, in a projection that fighting would last through February.

The Bank of Israel is urging the government to rein in spending unrelated to the war to balance out the additional defence and home-front expenses, saying looser fiscal policy could slow the pace of interest rate reductions. REUTERS