Overview

• 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.