Israel approves revised war budget to $222 bn extending reliance on debt

Israel's parliament approved a 2026 state budget of 699 billion shekels ($222 billion), with a significant defense supplement to fund the ongoing war with Iran. The budget includes a deficit target of 4.9% of GDP, with defense spending rising to 143 billion shekels, a 120% increase from 2023. Additional funds are allocated for military inventory and reserve soldiers. The budget's approval is crucial for Prime Minister Netanyahu's government, as failure to pass it by March 31 would lead to its collapse. The plan also includes tax benefits to counteract war-related economic impacts.