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The Finance Ministry predicts that the deficit will be 6.6% of the GDP for 2024.
By Vered Weiss, World Israel News
The Israeli government approved the 2024 budget of 582 billion shekels on Monday with a total increase of 70 billion shekel over the original budget proposal.
Amendments to the budget added 55 billion shekel for defense and there were 20 billion shekel of across-the-board cuts.
The Finance Ministry predicts that the deficit will be 6.6% of the GDP in 2024.
The budget compensates reservists and their families, evacuees, and others impacted by the war.
Finance Minister Bezalel Smotrich said, “We changed the priorities so that every reservist and every combat soldier and his family knows that there is a government that stands behind him and fully takes care of him.”
He added, “We will not relent in our concern for them because it is our duty and they are the engine of this nation.”
Smotrich concluded, “Today we are changing the order of priorities and embracing our reservists and fighters.”
The ministry devoted 9 billion shekel to the “Reserve Recruits” program intended to benefit reservists and their families.
Other notable increases included compensation for evacuees, property tax funds, money for local authorities who have absorbed refugees and stimulant programs for hi-tech and real estate sectors.
The vote came after an intense 24 hours of debates with ministers upset about cuts to their ministries and demanding reductions in other areas.
Cuts of 3% were initially imposed on all ministries but were removed from education, healthcare, welfare, and police after ministers protested.
The National Unity Party led by Benny Gantz voted against the budget because it didn’t include desired cuts to certain ministries and a freezing of lawmakers’ salaries.
Although a 2023-2024 budget was approved before the war, the circumstances in the current conflict required a revision of the previous budget.
The Bank of Israel has warned about the rising deficit and has cautioned that making cuts and raising taxes may be required to balance the budget.
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The two countries have also held joint training exercises between their militaries.