Israel Increases Budget to Fund Wars Against Iran, Hezbollah

Israel’s parliament approved a state budget that should stabilize the ruling coalition until elections later this year and which will see defense spending increase significantly to cover the wars against Iran and in Lebanon.

The spending plan, set to run for the rest of 2026, will be funded by additional borrowing and cuts in some civilian spending. It marks a setback for Israel’s attempts to improve its fiscal standing and reduce its debt levels following the ceasefire in the war against Hamas in Gaza in October.