Israel's next government faces heavy debt, high defense costs

Israel's incoming government confronts a challenging fiscal landscape marked by substantial financial burdens and rising expenditures. Public debt is approaching 70 percent of gross domestic product, while estimated costs for ongoing conflicts have reached approximately 350 billion new Israeli shekels.

To maintain economic stability, the upcoming administration must carefully manage surging defense spending. At the same time, policymakers are pressured to address critical domestic needs by implementing urgent reforms in the labor market and the education sector.