Election campaign drowns out debate on Israel's soaring war-driven debt
As Israel's election race intensifies, candidates focus on security threats while largely ignoring the massive fiscal burden created by recent wars.
During the current parliamentary campaign, Israeli politicians are emphasizing external threats and military victories, sidestepping the staggering cost of recent wars that the central bank estimates at 350 billion shekels between 2023 and 2026, plus an additional 35 billion shekels for the Iran conflict. Defence spending now consumes more than 8% of GDP, contributing to a national debt that has climbed to roughly 1.4 trillion shekels.
Despite record tax receipts, the budget deficit and debt service obligations are rising faster than revenues, prompting warnings from the IMF. Demographic pressures, including a surge in emigration among high earners and the expanding ultra-Orthodox population reliant on state benefits, further complicate fiscal sustainability. Experts argue that without higher taxes or cuts to civilian spending, debt levels will keep climbing, yet no major candidate has made the economy a campaign focus. Meanwhile, unpaid bills to defence firms like Elbit Systems highlight the growing tension between security spending and fiscal health.
Why it matters
Israel's mounting war costs threaten fiscal stability and could shape future policy and election outcomes.
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