Overview

• On July 17, finance and defence ministries agreed to boost Israel’s 2025–26 defence budget by 42 billion shekels to sustain multi-front military readiness
• The extra funding authorizes immediate arms acquisitions and ammunition replenishment critical to ongoing IDF operations
• Defence Ministry awarded Israel Aerospace Industries a contract to speed serial production of Arrow interceptors after near-daily missile interceptions by Hezbollah, Iran and Yemeni Houthis
• A separate $20 million deal with Israel Weapon Industries will deliver advanced machine guns to strengthen IDF ground forces facing Gaza and northern fronts
• Defence spending has surged to 110 billion shekels, about 9% of GDP, prompting calls for medium-term fiscal restraint as economic growth slows