Israeli Political Deadlock Could Cost Economy Up to $3.8 Billion

DID Press: Israeli financial newspaper Calcalist has warned that the ongoing deadlock over forming a government and approving the 2027 budget could disrupt government operations and cost the Israeli economy between 6.5 billion and 12 billion shekels, equivalent to $2 billion to $3.8 billion.

According to the report, entering 2027 without an approved budget could delay the allocation of 10 billion to 15 billion shekels in planned spending, halt infrastructure tenders and postpone the implementation of economic reforms.Calcalist also warned that continued political instability could reduce tax revenues, make it more difficult to finance military spending and increase the government’s borrowing costs.

The newspaper reported that every two months of delay in passing tax reform and measures to combat the shadow economy could postpone the collection of 3 billion to 5 billion shekels in projected revenue.The continued deadlock could also disrupt government contracts, development plans and funding for municipal projects.