Israel Approves 2025 Budget Amid Economic Challenges and Political Tensions

The new budget, marked by austerity measures, faces opposition from within the government as it aims to address wartime economic strains.

Israel's 2025 budget, totaling NIS 607.4 billion, includes significant spending cuts and tax increases to manage the financial impact of ongoing military conflicts.
Finance Minister Bezalel Smotrich emphasized the budget's role in supporting war efforts and driving economic growth, with specific allocations for reservists and regional development.
National Security Minister Itamar Ben-Gvir and other members of the Otzma Yehudit faction opposed the budget, citing insufficient funding for interior security bodies.
The budget includes a controversial decision to raise welfare payments instead of linking allowances to inflation, affecting child allowances and other social benefits.
Economic forecasts predict low growth and a high budget deficit, with Israel's credit rating downgraded by major agencies due to the economic impact of the wars.