Netanyahu Says Israel To Approve Additional Budget By USD 13 Billion For War With Iran

Jerusalem: Israeli Prime Minister Benjamin Netanyahu has announced that the government will approve an additional budget to finance Israel’s ongoing military campaign against Iran, as tensions between the two countries escalate and the conflict places mounting pressure on the nation’s economy and defense resources.

Speaking during discussions on the state budget, Netanyahu said the war requires substantial financial backing to ensure that the Israel Defense Forces (IDF) has the necessary resources to sustain its operations. He stressed that the government must act swiftly to allocate additional funds to support military activities, strengthen defense infrastructure and maintain Israel’s operational readiness amid the continuing hostilities.

The Israeli government is reportedly preparing to approve a special wartime budget worth tens of billions of shekels. According to reports, the proposed expansion could amount to roughly 40 billion shekels around USD 13 billion, reflecting the scale of the military operations and the growing financial demands of the conflict.

Netanyahu emphasized that the country is in a prolonged and complex conflict and that additional resources are necessary to maintain military readiness, support the Israel Defense Forces (IDF), and manage the broader impact of the war. The government has also reportedly set aside other controversial legislative matters to prioritize the wartime budget.

The decision comes amid heightened hostilities between Israel and Iran, with both sides accusing each other of launching missile and drone attacks in recent weeks. Military exchanges and strikes targeting strategic facilities have intensified concerns of a broader regional escalation across the Middle East.

Israeli officials say the increased defense spending will also help maintain advanced aerial and missile defense systems, including the Iron Dome, which plays a crucial role in intercepting incoming projectiles aimed at Israeli cities and infrastructure.

Beyond direct military operations, the government is also expected to allocate funds to support civil defense, emergency services and the protection of key national infrastructure, as authorities prepare for the possibility of a prolonged conflict.

Defense, the most significant component of the expenditure plan, will reach 140 billion shekels – 115 percent more than in 2023, prior to the Gaza conflict. The total expenditure plan is now approaching 700 billion.

The additional funds are primarily intended for restocking military supplies and compensating reserve troops.

The earlier budget plan established a cap of 40,000 reserve troops for 2026, allowing a maximum service duration of 55 days for each individual. However, since the onset of the Iran war in late February, the military has summoned over 100,000 reservists.

The target deficit, originally established at 3.9 percent, is expected to be increased, although the exact amount is not yet determined, and will likely be decided during the Cabinet meeting on March 10.

Government borrowing has surged since the onset of the military response to Hamas' October 2023 assault, reaching nearly 280 billion shekels in 2024 and staying elevated at 200 billion in 2025.

The Finance Ministry estimates that the excess interest Israel is paying on its war loans amounts to 10 billion shekels each year; a greater deficit might push that amount even higher.

A deficit exceeding 3.9 percent may lead to an increase in Israel’s debt-to-GDP ratio, which is presently nearly 69 percent. Any part of the supplement that isn't financed through extra debt will necessitate reductions in other areas or the implementation of new taxes.

The government had previously disclosed austerity measures amounting to around 30 billion shekels to support Israel’s conflicts in Gaza, Lebanon, and Iran.

Nevertheless, Netanyahu has maintained that national security remains the government’s foremost priority during the conflict. He reiterated that Israel will continue to pursue its military objectives while ensuring the armed forces have the resources needed to sustain the campaign.

The proposed budget expansion is expected to be brought before the Israeli cabinet and parliament in the coming days, where it will likely receive strong backing from government allies amid the ongoing war.

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