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Israeli budget soars over cost of war on Gaza

August 12, 2014 at 11:50 am

Israel’s budget deficit reached 2.3 billion shekels ($661 million) in July because of the heavy cost of the massive war on the Gaza Strip, the Ministry of Finance revealed on yesterday.

According to the statement, the deficit is now 2.7 per cent of the country’s GDP, higher than the 2.5 per cent target deficit the government announced for the end of 2014. It is almost six times higher than it was this time last year, when it was 400 million shekels ($115 million).

Government expenses in the first seven months reached 141.1 million shekels ($40 million).

Last week, Israeli newspaper Haaretz estimated that the cost of the war on Gaza was around 15 billion shekels ($4.3 billion).

Last Thursday, Israeli Minister of Finance Yair Lapid held a press conference to discuss the financial crisis in Israel. He said his government is able to deal with the financial crisis.

However, he recognised there will be a future crisis. “Concerning 2015, I will not pretend that the operation is not creating new issues. We are working with the defence establishment, and there are new demands that did not exist before.”