The Israeli Ministry of War announced on Friday that the regime’s military budget for 2026 will increase to 112 billion shekels, equivalent to $34.6 billion, a figure that is about $4 billion more than the current year’s budget and is considered the highest level since the establishment of the regime.
The budget increase, finalized after lengthy negotiations between Israeli Defense Minister Katz and Finance Minister Bezalel Smutrinich, is part of the Israeli cabinet’s broader plan to add 350 billion shekels (about $107 billion) to the military budget over the next ten years, a move that would increase military spending by about 70 percent compared to pre-war levels.
According to military officials, this significant growth is necessary to rebuild the Israeli army, which, after its longest war since the Arab-Israeli conflict, is facing a shortage of personnel, weak equipment, and an urgent need to modernize operational units.
This decision comes as the Israeli cabinet approved a record-breaking NIS 619 billion budget for 2025, of which the military sector’s share was NIS 109.8 billion ($30 billion).
However, the Ministry of Finance has warned of the economic consequences and announced that increasing military spending could exacerbate the budget deficit and put additional pressure on the economy. Estimates indicate that implementing this program will impose an additional financial burden of about $11 billion annually, a burden that is considered “risky” in the current stagflationary environment.
