Israeli Cabinet approves 2025 budget ramping up defense spending amid fighting in Gaza and Lebanon

Israel’s Cabinet on Friday passed a budget for 2025 Friday, Prime Minister Benjamin Netanyahu’s office said, ramping up defense spending amid the war in Gaza and Israel’s invasion of Lebanon.

The budget, which must still be approved by Israel’s parliament before taking effect, increased allotted defense spending to at least $27.2 billion, Israeli media reported, though that could increase to $40 billion pending further cabinet discussions.

In the last year, Israel spent $27.5 billion on defense, according to the the Stockholm International Peace Research Institute.

“We have come together for an important, difficult, but necessary budget in a year of war,” Netanyahu said after the budget was approved.

The budget has been mired in controversy in Israel, with the destruction caused by conflicts on two fronts driving up government expenditures and debt, a mass call-up of reservist soldiers hurting families and small businesses, and international credit ratings being downgraded.

Economists have called for an end to the war with Hamas in Gaza and for far-right Finance Minister Bezalel Smotrich to construct a budget that reduces the country’s deficit — something that would require unpopular decisions such as raising taxes or cutting spending.

Smotrich on Friday claimed the budget would reduce the deficit and that spending allocations were “intended to support all war efforts until victory” and allow Israel to “emerge from war into accelerated growth.”

Opposition lawmakers promptly criticized the budget for allocating funds to government ministries — run by Netanyahu’s far-right and ultranationalist coalition partners — which they described at superfluous. Yair Lapid wrote on X that the budget “distributes billions of shekels to 10 unnecessary government ministries. They’ve lost their shame.”