The next government will pay the bill that Netanyahu left it

An economic analysis of the legacy that the Netanyahu government is leaving for the next government: a budget surplus of about NIS 10 billion in 2022 turned into a deficit of 3.2% of GDP by September 2026. The debt-to-GDP ratio rose from about 60.5% to about 68.5%. Interest payments that the successors will inherit will be about 50% higher. The article warns of a political-budgetary trap: the next government will be forced to pay for the past, fund security, and repair eroded services, while facing a public that has already absorbed tax increases.

The article analyzes the economic legacy that Benjamin Netanyahu's government is leaving for the next government. It begins by describing the budgetary situation: in 2022, when the current government took office, Israel ended the year with a budget surplus of about ten billion shekels. The debt-to-GDP ratio was declining, and the country enjoyed breathing room. The war changed the picture: the deficit soared, the debt-to-GDP ratio rose from about 60.5% at the start of 2023 to about 68.5% at the end of 2025, and the interest payments that the outgoing government will bequeath will be about 50% higher than those it inherited itself. The article notes that in September 2026 the deficit fell to 3.2% of GDP, but the Bank of Israel explained that part of the improvement stems from a continuing budget and low expenditures. It warns that the next government will face higher debt, narrower breathing room, and a public that has already absorbed tax increases in 2025 (VAT, freezing of income tax brackets, increased National Insurance payments). The article emphasizes the political difficulty: the outgoing government embedded hundreds of millions of shekels in coalition allocations into the budget base, making any attempt to cancel them a move that will be presented as a 'cut'. It notes that planned civilian spending per capita in 2026 is about 3% lower than in 2025, and that the gap between the size of the budget and the services the citizen receives is widening. The conclusion: the incoming government will be forced to pay for the past, fund current security needs, and repair eroded public services, while making unpopular decisions.