Israel is moving toward a potential NIS 20 billion boost to the defense budget, as strong economic growth and urgent military procurement needs help break a long-running budget deadlock.
By David Brummer
The government is preparing to transfer an additional NIS 20 billion to the IDF for urgent procurement, while considering a longer-term increase in the defense budget baseline from NIS 70 billion to NIS 90 billion annually, according to Israel Hayom.
Israel’s long-running dispute over defense spending appears to be nearing a resolution, with the government preparing to approve a major funding increase for the IDF.
The government’s legal advisory unit is expected to drop its objection to reopening the state budget during the election period, potentially clearing the way for an immediate NIS 20 billion transfer to the military. The additional funding would bring the total defense budget to around NIS 163 billion.
Prime Minister Benjamin Netanyahu is expected to bring the proposal before the cabinet in the coming days, after pushing ahead despite objections from the Finance Ministry’s Budget Division over restrictions on major budget transfers during an election period.
Finance Minister Bezalel Smotrich has reportedly agreed to allow essential funding needed to maintain the IDF’s combat readiness, while a larger long-term force buildup program would be left for the next government.
The emerging agreement could also raise the defense budget baseline for the next three years from NIS 70 billion to NIS 90 billion. The proposal would still need to pass several stages in the Knesset before the funds can be released.
The IDF is facing immediate procurement needs as well. According to the report, military ammunition production requires additional raw materials to maintain output through the end of the year.
The potential increase comes as Israel’s economy has performed considerably better than expected. Newly released Central Bureau of Statistics figures showed GDP growing by 15.4% on an annualized basis and 3.6% compared with the previous quarter.
Business-sector GDP rose 16.6%, while private consumption increased 14.7% and exports of goods and services, excluding startups and diamonds, jumped 25.2%.
The stronger figures are expected to translate into higher tax revenues and provide the government with greater fiscal room to increase defense spending.
Finance Ministry officials also pointed to Nvidia’s growing presence in Israel as one factor contributing to the economic performance, although they stressed that the broader growth was significant in its own right.
The immediate NIS 20 billion transfer could reach the military within roughly a month, provided it clears the cabinet and Knesset approval process.
