Israelis Face Rising Costs Amid War-Related Financial Strain
As the war bill escalates, Israelis grapple with soaring living expenses and economic challenges
Israel, Cost of Living, War Expenses, Economy, Netanyahu
Tel Aviv: It’s tough out there for Israelis right now. With taxes going up and everyday bills skyrocketing, many families are feeling the pinch. The government’s new war budget is a whopping 40 billion shekels, and it’s hitting everyone hard.
People are talking about it everywhere, from coffee shops to radio shows. A recent tax hike, including a 1% increase in value-added tax, is just one of the changes that’s making life more expensive. Families are feeling the squeeze, and it’s a hot topic in the media.
One mom, Adi, shared on the radio that her family will be paying over 17,000 shekels more each year. She’s got three kids and a husband in tech, but they’re still relying on their parents for help. It’s a tough spot to be in when you’re supposed to be the ones supporting your family.
Since the conflict with Hamas began, the government has been reshaping its approach to national security. They’re ramping up military spending, which is expected to rise by at least 20 billion shekels annually over the next decade. That’s a big jump from what they were spending before the war.
While the fighting has devastated parts of Gaza and Lebanon, it’s also taken a toll on Israel’s economy. Industries like construction and tourism are struggling, and many people are being called up for reserve duty, leading to labor shortages. The economy only grew by 0.4% last year, making it one of the slowest-growing developed nations.
Experts warn that these changes could deepen the divides in society. Many skilled workers are leaving, feeling overwhelmed by the situation. There’s a growing sense of frustration among those who feel ignored by the government, especially those who are the backbone of the economy.
In 2024, Israel borrowed a staggering amount to fund the war, and the budget deficit has soared. To keep things from getting worse, the government is aiming for a lower deficit in 2025. But with taxes going up, living in Israel is about to get even pricier.
Sharon from a non-profit organization mentioned that they’ve seen a huge increase in families reaching out for help. Many are already struggling with rising interest rates from a couple of years ago, which made mortgages and loans more expensive.
For the next few years, tax bands and benefits won’t be adjusted for inflation, and public-sector salaries are frozen. Property taxes are also going up. While many Israelis agree that some sacrifices are necessary for safety, there’s frustration with the government for not making cuts that would affect its political base.
As these austerity measures kick in, more people might consider moving abroad. The number of skilled workers leaving has doubled recently, and they’re often the ones with the best opportunities elsewhere.
Netanyahu is also facing pressure regarding military service exemptions for the ultra-Orthodox community. With many others having served, there’s a growing demand for fairness in military duty. Whichever way it goes, it’s bound to create tension.
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