FALCON POWERS – The prolonged war in Gaza over the past seven months has inflicted significant losses on the Israeli economy, depleting its foreign currency reserves by approximately $5.6 billion. This has prompted Tel Aviv to seek alternatives to cover the expected budget deficit of $8 billion in 2024, which may include tax increases.
According to the Israeli Central Bank, the country’s foreign currency reserves decreased by around $5.63 billion at the end of April, reaching $208 billion. Additionally, reserves declined by about 41% as a percentage of the gross domestic product (GDP).
Israeli Debts in Numbers
According to the Israeli Ministry of Finance, Israel’s borrowing due to the war in Gaza amounted to approximately $43 billion in 2023, extending into 2024. This includes:
- $304 billion as the total public debt by the end of 2023.
- Additional $21 billion in debts.
- $6 billion as the total loans in 2022.
The debt-to-GDP ratio stood at around 62.1%.
It is expected that this debt will reach 67% in 2024.
Israel raised $8 billion from the sale of international bonds between October and April.
Observers anticipate that 2025 will be an economically challenging year, with a further increase in the budget deficit, ultimately leading to a deterioration in the public debt-to-GDP ratio and a potential credit rating downgrade for Israel.
