Jerusalem: Israel’s election campaign is focusing heavily on security and foreign threats, while the country faces growing economic pressure from the rising cost of multiple wars, increasing debt and the departure of high-earning residents, according to an Al Jazeera report.
With parliamentary elections due in October, political contenders have largely emphasised their ability to confront threats across the region. However, the financial consequences of years of conflict have received comparatively less attention during campaigning.
War costs push debt higher
The Bank of Israel estimated that 350 billion shekels ($118 billion) was spent on wars in Gaza, Lebanon, Syria and elsewhere between 2023 and 2026, excluding the war with Iran that began in late February. A further 35 billion shekels ($11.8 billion) was spent on that conflict, according to the Finance Ministry.
Defence spending reached 249 billion shekels ($84 billion), while national debt has risen to about 1.4 trillion shekels ($480 billion), from 1.07 trillion shekels ($365 billion) before October 2023.
Economy faces additional strain
Although tax collection reached a record 509.3 billion shekels in 2025, defence expenditure and debt-servicing costs are increasing faster. The International Monetary Fund has warned that the 2026 budget deficit ceiling is too high to put government debt on a declining path.
Another concern is the growing departure of high-income residents. Tax authority data cited by Al Jazeera shows emigration among the top 10 per cent of earners has increased by 80 per cent since 2019.
Political debate remains focused on security
Economists cited in the report warned that Israel may need higher taxes or reductions in civilian spending to contain its debt burden. Yet few major political figures are publicly focusing on the cost of sustaining higher defence spending.
Despite these pressures, Israel’s economy is expected to grow by 3.5 per cent this year, supported partly by its technology and defence sectors.
The growing challenge for the next government will be balancing security requirements with the mounting financial cost of prolonged conflict.