Even if a full-scale war doesn’t break out in the North, Israel’s deficit is expected to widen to 8.1% of the Gross Domestic Product, far above the 6.6% deficit ceiling established in 2024. Budget.
A high debt-to-GDP ratio may “further endanger Israel’s credit rating and lead to an additional rise in interest payments,” said the Taub Center.
The shekel’s value has been ravaged by the war in Gaza, now in its 10th month, and the controversy over judicial reform before that.
Because of the judicial reform protests, the shekel was down 17%, and since the war, it has been worth 25% less than it would have been without these headwinds.
