Israel Passes Crucial Defence Budget Amid Ongoing Conflict

Israel's parliament approved a defence-heavy 2026 budget, allowing Prime Minister Netanyahu to avoid early elections as the country wages a joint war with the U.S. on Iran. The 699-billion shekel budget helps stave off potential elections and boosts defence spending, impacting fiscal policy and economic stability.

In a decisive move, Israel's parliament approved the 2026 state budget, a crucial step that aids Prime Minister Benjamin Netanyahu's administration in avoiding impending elections. This backing comes amidst the ongoing joint military operation with the United States against Iran.

The newly sanctioned budget amounts to a significant 699 billion shekels with a substantial allocation towards defence, reflecting the current geopolitical tensions. It coincides with ongoing hostilities involving Hezbollah in Lebanon and is weighing heavily on the Israeli economy, with weekly costs approximating $1.6 billion.

Passage of the budget was timely, as failure would have likely led to snap elections within 90 days—a scenario polls suggested Netanyahu might lose. While elections are tentatively expected in late October, the budget injects more into defence, thereby amplifying Israel's budget deficit and complicating fiscal policies.

(With inputs from agencies.)