In its sitting on Wednesday, the Knesset Plenum voted to approve in first reading the Deficit Reduction and Limiting Budgetary Expenditure Bill (Amendment No. 29), 2025. In the vote, 48 Members of Knesset supported the bill, with 40 opposing votes and one abstention. The bill will be turned over to the House Committee to determine the committee in which it will be deliberated.
It is proposed to raise the deficit limit for 2025 so that the total deficit rate will not exceed 5.2% of the GDP. It is further proposed to increase the permitted Government expenditure for 2025, as a share of the total permitted expenditure for 2024, so that it will amount to 20.4%. This includes 5.6% for funding the expenditures required for security needs due to the significant military actions, including the campaign against Iran, and 0.4% for funding the expenditures required for civilian needs stemming directly from this warfare.
The explanatory notes to the bill state: “The Budget for Fiscal Year 2025 Law was approved in March 2025. In the course of May 2025, the State of Israel launched Operation Gideon’s Chariots, in which the scope of mobilization of reserves increased beyond the expected, and led to additional warfare expenditures. On June 13, 2025, the State of Israel launched operation rising Lion against Iran, which included significant strikes by the security forces by various means aimed against Iran. These strikes led to counter-strikes by Iran against Israel, and significant defensive efforts by the security forces.
“In light of the above, the Government was called upon—and is still called upon—to spend considerable amounts, both for the purpose of the warfare and as a response for the victims of the hostile acts and the increase in their number due to the ongoing intensive warfare, which was not reflected in the forecasts during the preparation and approval of the Budget Law for 2025. in order to enable the enactment of the Additional Budget Bill, it is necessary to raise the expenditure limit prescribed in the fiscal frameworks law as stated.”
Related Topics
