Bank of Israel Criticizes the Israeli Government's Handling of the New Budget

Translation by SadaNews Economics - The Bank of Israel criticized the Israeli government's handling of the budget that was approved last night.

The Bank of Israel stated in a statement, as translated by the Economics section of SadaNews, that "the geopolitical environment that has arisen following Operation (Lion's Roar) shifts the risks threatening economic activity to lower levels, at least in the short term, and requires careful management of the financial framework."

It added: "At this stage, it is important to avoid including new programs in the budget and making unnecessary decisions for the war effort, especially those that do not contribute to long-term growth, as well as tax cuts."

The bank emphasized the need to stop budgets that are not allocated for war.

The Israeli government approved the new budget for 2026 after midnight, increasing the deficit to 5.1%, raising the Ministry of Defense's budget by 32 billion shekels, and allocating a "off-budget fund" worth 12.8 billion shekels, which will be used if the war continues at a high intensity.