A top economist sees Israel’s fiscal future on the ballot as costs of war, division mount

Prof. Zvi Eckstein, a former Bank of Israel deputy governor, warns that Israel's October 27 election will determine whether the economy continues long-term growth or enters a lost decade of stagnation, citing the costs of war, internal division, and ballooning defense spending.

Prof. Zvi Eckstein, a former deputy governor of the Bank of Israel, warns that the October 27 election will determine whether Israel continues on a path of long-term growth or enters a lost decade of stagnation. In an interview with The Times of Israel, Eckstein argues that the debate around internal division, the government's efforts to overhaul the judiciary, and the refusal to draft ultra-Orthodox citizens have substantial economic costs. He notes that defense spending has ballooned to 8% of GDP, public debt has risen from 60% to nearly 70%, and the economy risks a gradual downfall if issues like the burden on reservists and democratic instability are left unaddressed. Eckstein calls for growth-enhancing reforms in education, vocational training, and transportation to integrate ultra-Orthodox and Arab populations into the labor force. The article notes that the Prime Minister's Office and Finance Ministry did not respond to requests for comment.