JERUSALEM (Reuters) -Israel’s cabinet on Sunday approved a three-year plan that would bring the state’s budget deficit to below 3% of gross domestic product through 2028, down from an expected 5% this year.

The Finance Ministry plan would see the deficit at 2.8% of GDP in 2026 and 2027, and 2.9% in 2028.

The deficit is projected to be around 5% this year after hitting 6.9% in 2024 on the heels of a spike in spending to finance Israel’s war against Hamas in Gaza since Hamas’ October 7, 2023 attack.

As part of the plan, the economy is slated to grow 4.4% in 2026. Hurt by the war, growth was some 1% in 2024 and is projected to grow 3-3.5% this year.

The Finance Ministry said in a statement the plan does not include the financial implications of an escalation in military conflict over the

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