Israel’s War Spending: $24.5 Billion Debt & 68.6% Debt-to-GDP Ratio (2025)

Israel’s military and civilian expenditures related to the ongoing conflict have significantly impacted the nation’s finances, leading to increased public debt. Preliminary estimates from the Accountant General of the Ministry of Finance indicate approximately 91 billion shekels were spent in 2025 to support the war effort.

Rising Debt and Budget Deficit

These increased expenditures have directly contributed to a rise in public borrowing and a heavier debt burden for the country. The ratio of public debt to Gross Domestic Product (GDP) increased by 0.9 percentage points, reaching 68.6% at the end of last year, compared to 67.7% in 2024.

Did You Know? Since the start of the war against Hamas, triggered by the October 7, 2023 attacks, Israel has raised a total of 524 billion shekels in public debt through October 2025.

Despite this increase, Israel’s debt-to-GDP ratio remains lower than that of the Eurozone (87.8%), the United States (125.1%), and Japan (229.6%), according to data cited by the Ministry of Finance from the International Monetary Fund (IMF). The state budget deficit for 2025 reached 4.7% of GDP, equating to roughly 98.6 billion shekels.

Investor Confidence and Future Adjustments

In 2025 alone, Israel raised 207 billion shekels in public debt. Yali Rothenberg, the Accountant General, noted the strong demand for the country’s debt as a sign of investor confidence in the Israeli economy. “Au cours des deux dernières années, nous avons levé d’importantes sommes d’argent sous forme de dette, et la demande élevée et stable [pour la dette du pays] témoigne de la confiance des marchés dans l’économie israélienne,” Rothenberg stated.

Expert Insight: The substantial increase in public debt, while currently supported by market confidence, presents a long-term fiscal challenge. Maintaining this confidence will be crucial as Israel navigates the need for future budgetary adjustments to reduce the debt-to-GDP ratio.

Rothenberg indicated that once the situation stabilizes, measures will need to be implemented to restore the budgetary trajectory and lower the debt-to-GDP ratio.

Frequently Asked Questions

What was Israel’s estimated military expenditure in 2025?

According to a preliminary estimate from the Accountant General of the Ministry of Finance, Israel spent approximately 91 billion shekels in 2025 on military, defense, and civilian needs to support the war effort.

What was Israel’s budget deficit in 2025?

The state budget deficit in 2025 was 4.7% of GDP, which amounts to approximately 98.6 billion shekels.

How much public debt did Israel accumulate since the start of the conflict?

From the beginning of the war against Hamas, triggered by the October 7, 2023 attacks, through October 2025, Israel raised a total of 524 billion shekels in public debt.

How might a sustained period of high debt impact Israel’s long-term economic flexibility?