According to preliminary figures released by the Israeli Finance Ministry, Israel’s fiscal deficit has widened to 8.1 percent of gross domestic product (GDP), with 8.5 billion shekels ($2.2 billion) added in July alone.

It marks the fourth month that the deficit is above the government target of 6.6 percent of national output set for 2024, amid growing military and civilian spending.

Israel announced a budget deficit of 4.2 percent in 2023.

Gaza war costs ballooned to 88.4 billion shekels, The Times of Israel reported.

“The increase is mainly due to high expenses for the defense and security system as well as for civil ministries because of the war in addition to rigid payments resulting from agreements,” the Israeli Finance Ministry noted in the report. 

Even excluding war expenditures, the Israeli government’s spending has increased by 8.7 percent since the start of the year.

However, state revenues have risen compared to the same period last year.