Israel Faces Budget Challenges and Economic Costs in War with Hamas

Israel faces challenges in managing its expenditures during the war, with concerns about the impact on the market and government spending cuts. The war has increased expenses for military funding, business compensation, and victim support, leading to a budget deficit. Prime Minister Benjamin Netanyahu aims to provide financial support, which may raise the deficit and debt to GDP ratio. The war is costing the economy around $260 million daily, causing the government's budget deficit to balloon. The central bank has cut its economic forecasts and maintained the key interest rate to support the shekel.