--- title: "Israel's national debt has risen by a third since October 2023" description: "Debt has gone from about 1.07 trillion shekels before the war to around 1.4 trillion now. Defence has grown from 5.2 percent of GDP to more than 8. Tax receipts rose 12 percent last year, and one economist quoted says the trajectory is unsustainable." category: "Business" category_url: https://newsparlor.com/category/business author: "Thomas Berger" published: 2026-08-23T13:39:15.000Z updated: 2026-08-23T13:39:15.000Z canonical: https://newsparlor.com/article/israels-national-debt-has-risen-by-a-third-since-october-2023 tags: ["israel", "public-finance", "defence-spending", "debt", "economy"] --- # Israel's national debt has risen by a third since October 2023 Debt has gone from about 1.07 trillion shekels before the war to around 1.4 trillion now. Defence has grown from 5.2 percent of GDP to more than 8. Tax receipts rose 12 percent last year, and one economist quoted says the trajectory is unsustainable. Israel's national debt stood at about 1.07 trillion shekels, roughly $365 billion, before October 2023. It is now around 1.4 trillion shekels, about $480 billion, [according to Al Jazeera](https://www.aljazeera.com/news/2026/8/23/israeli-politicians-focus-on-foreign-threats-ignoring-spiralling-debt). That is an increase of roughly a third in under three years. ## Where the money went The report puts spending on the wars in Gaza, Lebanon and Syria between 2023 and 2026 at 350 billion shekels, about $118 billion. Fighting with Iran, which began in late February, had added a further 35 billion shekels, about $11.8 billion, as of reporting in April. Defence spending alone across the period is put at 249 billion shekels, about $84 billion. As a share of the economy, defence went from 5.2 percent of GDP in 2023 to more than 8 percent in 2024. The government also owed private defence contractors $3.5 billion as of April, a figure the report attributes to the Israeli business daily Calcalist. ## The revenue side, which is better than expected It is worth setting the other half of the ledger out, because a debt story that omits it is not a complete one. Tax collection in 2025 came to 509.3 billion shekels, about $172.6 billion, up 12 percent on the previous year. The government expects growth of 3.5 percent in 2026. An economy growing at 3.5 percent with tax receipts up 12 percent is not an economy in crisis. That is what makes the debt question a matter of trajectory rather than of immediate solvency, and it is why the disagreement here is about the future rather than the present. ## What the economists quoted say Michael Ben-Gad, professor of economics at City St George's, University of London, gave the long-run figure: "The long term projection for Israel's debt [to GDP percentage] fluctuates between around 67 percent and 70 percent." Before October 2023 it was around 60 percent. His verdict on the path was two words: "It's unsustainable." Shir Hever, a political economist, pointed at the timing problem rather than the level: "When the government starts talking about paying its debts in ten years' time, that still hurts them." A debt-to-GDP ratio in the high sixties is not, in international terms, an alarming number, and several large economies carry considerably more. What Ben-Gad is describing is the direction and the driver: a rise of ten points caused by spending that is not discretionary and cannot be planned down. ## The political argument, and whose it is The headline on our source says Israeli politicians are ignoring this. That is the publication's framing and we are not adopting it. The evidence offered for it is a single quote. Yossi Mekelberg, an associate fellow at Chatham House, said: "Unfortunately, there just isn't any electoral benefit in talking about the economy." That is one analyst's assessment of political incentives, not a demonstration that the subject is being ignored. The report also carries figures on who bears the burden: emigration among the top 10 percent of earners is up 80 percent since 2019; Haredi households receive a net average of 6,000 shekels a month from the state, with just over half of Haredi men in employment, while non-Haredi households pay on average 8,800 shekels a month more in tax than they receive back. Those distributional numbers sit inside a long-running Israeli political argument about work and welfare, and they are contested. No Israeli government or finance ministry official is quoted anywhere in the article. That is a real gap, and it means one side of this story is absent. We verified the account from a single publication. ## Sources - [Israeli politicians focus on foreign threats, ignoring spiralling debt](https://www.aljazeera.com/news/2026/8/23/israeli-politicians-focus-on-foreign-threats-ignoring-spiralling-debt)