JERUSALEM, Dec. 5 (Xinhua) -- The Israeli government on Friday approved the state budget for 2026, totaling 662 billion shekels (about 205 billion U.S. dollars), according to statements issued by the Prime Minister's Office and the Finance Ministry.
The budget, still requiring parliament approval by March 2026, represents a slight increase compared to the current year, when the budget was initially set at 619 billion shekels and later revised in August to 650 billion shekels due to the costs of the prolonged conflict.
The deficit ceiling for 2026 is set at 3.9 percent of GDP, much lower than the 5.2 percent set for the current year.
According to the Finance Ministry, the new budget was designed to place the Israeli economy back on a path of growth and fiscal responsibility following two years of expanded wartime spending.
As agreed earlier in the day between the defense and finance ministries, the defense budget will be 112 billion shekels. This is lower than the wartime budgets but still 47 billion shekels higher than the pre-war budget in 2023.
The plan also includes an income tax cut, a reform of dairy imports intended to reduce consumer prices, and over 3 billion shekels earmarked for advancing artificial intelligence.
