Finance Ministry reports Israel’s 2025 deficit is lower than expected
Israel’s 2025 budget deficit came in lower than originally forecast, despite heavy war-related spending, according to year-end data released by the Finance Ministry.
The deficit stood at 4.7% of GDP, about NIS 99 billion, shrinking by roughly NIS 38 billion compared to 2024, largely due to higher state revenues from a 1% VAT increase and a freeze on income-tax brackets.
The Finance Ministry estimates direct war costs at about NIS 199 billion since the fighting began, with NIS 78 billion spent during 2025 alone.
Kan.org.il is the Hebrew news website of the The Israeli Public Broadcasting Corporation
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