Israel's 2025 budget: Smotrich announces changes to how budget built, work to start this week

There will be significant changes in how Israel’s 2025 budget will be formulated compared with how they usually are, Finance Minister Bezalel Smotrich said Sunday. Talks on the budget will commence following Shavuot, he said.

Presentations on the budget will be held during two focused days instead of over the course of months, as they are normally held, Smotrich said. The Bank of Israel’s governor will participate from the start of the process, he said.

The budget must focus on moving the country from war to growth by emphasizing hi-tech, the real-estate market, integrating different populations, increasing productivity in the labor market, fighting the black market to increase the tax base, absorbing more immigration, and more, Smotrich said.

The budget’s guiding principles would be fiscal conservativeness, responsibility, efficiency, flexibility, and transparency, he said, adding that it will include significant cuts to many ministries.

How the war is impacting economic decisions 

“The continuing war and its impact on the economy force us to show discipline and fiscal responsibility, as well as full transparency about the data and the process by which policy is formed and decisions are made,” Smotrich said.

“I expect my friends in the government and coalition to understand how serious the situation is and to help [share the responsibility],” he said. “I intend to help them to do this by giving them greater authority and flexibility to manage the budgets that remain in their hands.”