Jerusalem, Sep 4 (IANS) Israeli Finance Minister Bezalel Smotrich has unveiled the government’s 2025 budget plan, detailing spending cuts as Israel grapples with rising costs related to the Gaza war.
The plan, expected to be approved by the end of the year, aims to reduce the deficit to 4 percent of gross domestic product (GDP) in 2025, down from 6.6 percent in 2024, reports news agency Xinhua.
The heavy cost of military operations that began in Gaza last October has raised Israel’s deficit to 8.1 percent of gross domestic product for the 12 months from August 2023 to July 2024.
Smotrich said on Tuesday that the war, which is nearing its 11th month, has cost Israel an estimated 200-250 billion shekels (about $54-68 billion), making it “the longest and most expensive war in Israel’s history.”
The finance minister has faced pressure from the Bank of Israel and investors to clarify next year’s fiscal policy. The central bank has suggested spending cuts, tax hikes or other revenue-raising measures, but Smotrich has argued that raising taxes during the war is inappropriate.
To tackle the losses, Smotrich’s plan includes saving 35 billion shekels ($9.48 billion) through measures such as reforming government ministries and the public sector as well as freezing salaries, tax rates and social security benefits.
—IANS
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