Israel-Hamas war doubles Israel's debt raising in 2023
The outbreak of the Israel-Hamas war in October led to a doubling of Israel's borrowing in the past year, with the state raising 160 billion shekels in debt.
Israel's war with Palestinian Islamist terror group Hamas led to a doubling of the country's borrowing last year, the Finance Ministry said on Monday.
Israel raised 160 billion shekels ($43 billion) in debt in 2023 - half of it, 81 billion shekels, since the outbreak of the war in October, the ministry said in a report.
It raised 63 billion shekels in all of 2022.
Accountant General Yali Rotenberg said that 2023 was a challenging year that required a sharp increase in financing needs and "required tactical and strategic adjustments" in the government's debt-raising plan.
"Despite the many uncertainties and challenges, the ability to raise debt in local and global markets, even in times of war, in significant volumes and very high coverage ratios, shows the high accessibility of the State of Israel to the markets and is evidence of the strength of the Israeli economy," he said.
Total debt amounted to 62.1% of the gross domestic product in 2023, up from 60.5% in 2022 due to the spike in war spending and is expected to reach 67% in 2024.
Israel raises record in international bond sales, but Moody's downgrades credit rating
Israel last month raised a record $8 billion in its first international bond sale since the Oct. 7 Hamas attacks, with very high demand even after Moody's gave Israel its first-ever sovereign credit rating downgrade in February.
The government in 2023 raised some 116 billion shekels, or 72% of the total, domestically, with 25% borrowed overseas and the rest in local non-tradable debt.
Israel's public debt grew 8.7% last year to 1.13 trillion shekels, partly boosted by higher inflation and interest rates, the ministry said.
Interest expenses-to-GDP ratio was unchanged last year at 2.4%.
In its credit ratings downgrade to 'A2', Moody's cited material political and fiscal risks for the country from its war with Hamas.
Lawmakers a month ago gave their final approval to an amended 2024 state budget that added tens of billions of shekels to fund the more than six-month old war with Hamas, with extra spending on defense and compensation to households and businesses hurt by the conflict.
Jerusalem Post Store
`; document.getElementById("linkPremium").innerHTML = cont; var divWithLink = document.getElementById("premium-link"); if (divWithLink !== null && divWithLink !== 'undefined') { divWithLink.style.border = "solid 1px #cb0f3e"; divWithLink.style.textAlign = "center"; divWithLink.style.marginBottom = "15px"; divWithLink.style.marginTop = "15px"; divWithLink.style.width = "100%"; divWithLink.style.backgroundColor = "#122952"; divWithLink.style.color = "#ffffff"; divWithLink.style.lineHeight = "1.5"; } } (function (v, i) { });