Defense Budget

Finance Minister Bezalel Smotrich announced plans for a 2.6 billion shekel defense cut, drawing from civilian budgets amid ongoing tensions over the 2026 defense funding.

Three years of multi-front war have pushed Israel's defense budget to 540 billion shekels, straining reserve forces and highlighting severe personnel shortages as military expenditures continue to soar.

The Knesset Finance Committee reviewed a 14.8 billion shekel defense boost and a disputed 13 million shekel loan for Slice Provident Funds amid missing financial reports.

Israel's Ministry of Finance is formulating a costly agreement to compensate defense giants Elbit, IAI, and Rafael for financing costs arising from a 17 billion shekel debt.

Ministry of Finance data reveals that the war since October 7, 2023, has cost Israel 230 billion shekels, amounting to about 79,000 shekels per household and heavily straining public finances.

The IDF has begun releasing reservists and halting recruitment due to a massive 40 billion shekel defense budget shortfall, sparking fierce disputes between military brass and the Ministry of Finance.

A warning letter was sent to the Prime Minister following the failure to transfer 40 billion shekels. Industry heads warn of the closure of ammunition production lines. The IDF is preparing for immediate cuts in reserve duty days and a halt to the restoration of tanks damaged in the war.

Security sources in the UK reveal that the British Army has been forced to immediately stop "non-essential" training exercises in order to save money. The decision comes against the backdrop of heavy budgetary pressures on the Ministry of Defence and is expected to affect the readiness of the forces. The suspension, which is not the army's choice, is expected to last for most of the current year.

In a letter to the heads of the Armed Services Committees, the organizations demanded the removal of a clause from the defense budget bill that would accelerate joint military technology development and production in the US with Israeli defense industries. The bill has already passed the House and is awaiting Senate review.

The deal with Greece may be the first step in a plan to increase Israeli defense exports. Company revenues, foreign currency inflow, and reducing the burden on the state budget are three reasons for optimism.

The Pentagon is considering opposing British sovereignty over the Falkland Islands if Andy Burnham's government does not increase defense spending as required by NATO members. A senior US official who spoke to the Telegraph claimed that the option is on the table. An internal memo leaked last April first revealed the idea of using the Falklands as a diplomatic lever.

The Chief of Staff warned that the budget shortage is already harming IDF readiness. The army claims that 40 billion shekels promised to the defense establishment have not been transferred, and warns: without a solution by September 10, training and ammunition procurement will be affected. Simultaneously, a dispute has erupted over the retirement terms of the former Military Advocate General.

Globes has learned that the Ministry of Finance and the defense establishment have agreed on the establishment of a new monitoring system for the defense budget. The system will allow for full and real-time reflection of the defense bodies' engagements with the Accountant General's division. However, the Budget Commissioner opposes the move, believing it is insufficient.

The IDF defines the new Hummers as "force multipliers" that allow for rapid movement deep into enemy territory, but part of the jeep fleet has already crossed 30 years of service and the rate of wear is high. In the defense establishment, they warn that without opening the budget, it is impossible to renew the order of battle: "The ground forces need as many as possible, and as quickly as...

The Prime Minister claimed that the defense budget must be urgently increased by tens of billions of shekels, but the discussion in the government was canceled. It remains unclear whether the initiative will be implemented before the elections.

The Prime Minister and the Finance Minister are in a standoff over the IDF's demand for a massive budget increase to over 200 billion shekels. The Treasury warns that there is no room left for further spending cuts.

Globes has learned that the government is preparing to approve an additional tens of billions of shekels for security needs as early as next week. Analysts warn that this could necessitate future tax hikes and budget cuts.

After his promises regarding the cost of living were shattered, Benjamin Netanyahu is enslaving the economy for the sake of invented security needs. The banks' reports for the second quarter prove that the system has reached the glass ceiling of profitability. And also: the index to be published today.

Alongside new records in business activity, Israel Aerospace Industries (IAI) is dealing with increasing pressure on its cash flow, primarily due to a 5 billion shekel debt from the Ministry of Defense.

Secretary of Defense Pete Hegseth has decided to exclude Democratic members of Congress from classified briefings, a move that could jeopardize the approval of the defense budget.

Benjamin Netanyahu seeks to increase the defense budget for the next 13 years without identifying funding sources. Experts warn that this strategy increases debt and risks, undermining Israel's fiscal credibility.

On Friday, Globes revealed that Benjamin Netanyahu is demanding to open the state budget and increase the defense budget by 400 billion shekels over 13 years. In his first response, Bank of Israel Governor Amir Yaron warns of a rise in the debt-to-GDP ratio and says: 'I was not involved'

The Israeli government has approved the transfer of approximately one billion shekels to the defense budget. The funding includes 850 million shekels originally allocated as a grant to Intel for its Kiryat Gat plant expansion.

850 million shekels will be diverted from a budget intended for investments in the technology sector at the Ministry of Economy, and an additional 150 million from unallocated funds. The document emphasizes that without approval of the decision, it will not be possible to execute the procurement.

The government is expected to approve today, Sunday, the transfer of one billion shekels for defense procurement defined as "urgent." Most of the funding will be reallocated from the Ministry of Economy and Industry budget intended for investment and employment initiatives.

Prime Minister Benjamin Netanyahu has demanded an additional 50 billion shekels for the defense "strengthening package," sparking outrage from the Ministry of Finance amid ongoing inter-ministerial tensions.

Globes has learned that Benjamin Netanyahu wants to break the budget to transfer 400 billion shekels to the defense system, while emphasizing military procurement in his election campaign. However, this move, for which it is difficult to find justification at this time, could lead to a downgrade of Israel's rating and a significant tax increase next year.

The US administration's plan to build the largest warships since World War II carries a $275 billion price tag. A new Congressional Budget Office (CBO) report released Thursday suggests that US shipyards may lack the capacity to execute the project.

Since the outbreak of the Iron Swords war, the cost of reserve duty has exceeded 100 billion shekels. This accounts for more than a third of the total expenditure for the longest campaign in Israel's history.

With the IDF focused on Iran, senior officers warn of a critical shortage of munitions and interceptor missiles. Budgetary disputes between the Ministry of Defense and the Treasury are hindering the replenishment of vital military stocks.

The weekly review by Psagot Investment House highlights the divergence between global central banks and the expected surge in Israel's defense spending, which poses risks for investors.