Israeli Prime Minister Benjamin Netanyahu on Thursday presented for government approval what he hailed as a “responsible and balanced” 2026 state budget.
The proposed budget “above all meets all of Israel’s security needs,” the premier stated as he opened the government meeting. “We are bringing forward a good budget for the State of Israel; I am confident it will pass.”
Jerusalem “intends to lower taxes, including income tax,” Netanyahu stated. “We plan to reduce regulation and streamline our government systems. We will continue developing the northern and southern communities that were harmed; they will thrive more than ever.”
The most important thing in the budget, he said, was “assistance and grants for Israel Defense Forces soldiers in regular service and reserves, as well as for their families, because they deserve it.”
The budget “will provide them with all the support and framework they need, a framework we have already built and will expand even further,” Netanyahu vowed.
Israeli Finance Minister Bezalel Smotrich told fellow ministers that while the country’s economy was still buckling “under a heavy security burden,” the proposed budget contained “many major benefits for the Israeli people—some through your ministries, and some through reforms.”
“We’re boosting the economy and lowering prices; that is the challenge,” he said. “There will be debates and complexities, but I expect that in the end, all of us, together, will correct, improve and change what is needed,” he said.
“Before Shabbat, we will deliver very good news to the people of Israel, and I am convinced we will succeed together,” vowed the finance chief.
Israel’s state budget is approved first by the government, which finalizes the spending plan before sending it to parliament. Knesset lawmakers then debate the proposal and must pass it in three readings. Failure to do so before the March 31 deadline triggers automatic snap elections.
S&P Global Ratings (previously Standard & Poor’s) on Nov. 7 revised its outlook on Israel from negative to stable in light of the ceasefire in the two-year-long war on Hamas brokered by the Trump administration.
The “military de-escalation, underpinned by the ceasefire agreement between Israel and Hamas, has lowered immediate security risk for Israel,” S&P Global Ratings wrote.
The S&P Global division said that it could raise Israel’s credit ratings if its growth and fiscal outcomes proved stronger than currently projected.
