News - Middle East: Economic experts assert that the Israel enemy is navigating a critical juncture in its fiscal and economic health, where military pressures, a accumulating financial deficit, and international strains converge to pose a significant challenge to its economic stability.

They noted that the government may be compelled to take urgent, unprecedented measures in the near future to prevent further collapse as crises intensify.

Accumulating Fiscal Deficit

Economic expert Salim Al-Ja'dabi stated that "the Zionist entity is suffering a financial crisis that truly borders on an economic catastrophe." He indicated that the shortfall in revenues is forcing the entity's government to rely on "debt interest and the consecutive issuance of treasury bonds," which increases the debt interest burden and weakens its ability to meet financial obligations.

He pointed out that the continuation of these policies, alongside additional expenditures linked to military operations, "increases pressure on the general budget and places the economy in the danger zone."

For his part, researcher and economic expert Emad Akkoush mentioned that "the Israeli Knesset approved an increase in budget expenditures for 2025 by approximately 9.36 billion dollars, including adding interest on public debt." This has raised the financial deficit from around 18–20 billion dollars to 27 billion dollars, increasing the deficit-to-GNP ratio from 4.5% to 5.2%.

Akkoush added that the primary reason for this deficit is military spending and compensations for settlers who were displaced from their homes, in addition to policies of high interest on government bonds to attract investors.

Akkoush warned that the continued accumulation of the deficit over the past two years could lead to a "real economic crisis," especially if accompanied by threats from the European Union to impose sanctions. He added, "If the situation continues until next year, the Zionist entity will be compelled to enter negotiations with the Palestinian resistance to put an end to these pressures."

Impacts on Vital Sectors

In a related context, Al-Ja'dabi explained that military operations, particularly in the city of Umm al-Rashrash ("Eilat"), have paralyzed the tourism movement, which is one of the most important sources of income for the Zionist economy, with an estimated annual revenue of about 12 billion dollars from receiving 3.5–5 million international tourists.

He continued, stating that "the closure of the Eilat port has inflicted massive losses on the economy, with a direct impact on the local budget and municipal revenues."

Al-Ja'dabi also confirmed the impact of operations on the technology sector, which constitutes about 20% of Israel's GDP, represents 53% of exports, and employs 11% of the workforce.

He said, "Approximately 20,000 employees from technological competencies are leaving the entity, which exacerbates the crisis of skill shortages and weakens the competitive foundation of this vital sector."

Al-Ja'dabi also noted the impact of strikes on pharmaceutical industries, hydrogen, and the diamond trade, pointing out that annual diamond exports exceed 9 billion dollars, and the disruption of shipping and air lines has negatively affected the global supply chain.

He added, "Even the defense industries sector, including Iron Dome systems, has faced international criticism and declining interest from some countries in purchasing these systems."

As for the oil sector, Al-Ja'dabi mentioned that it has also been affected due to the targeting of ports and pipelines, confirming that the Umm al-Rashrash port and storage tanks holding 1.2 million barrels, in addition to petrochemical plants, are all facing significant disruptions, increasing economic pressure on the entity.

Fiscal Policies and Interest Rates

In a related context, Akkoush explained that Israeli enemy fiscal policy faces dual challenges, noting that most global central banks are gradually moving towards lowering interest rates, while "the Zionist entity is forced to raise interest rates due to the size of the deficit and the government's need to attract investors to buy treasury bonds."

He pointed out that these policies have affected the enemy government's ability to invest in public services such as road networks, hospitals, and schools, as well as support companies and attract foreign investments, deepening the economic crisis and weakening future growth.

Both Akkoush and Al-Ja'dabi warn that the continued accumulation of the deficit and military pressures could lead to a series of economic and political crises, indicating that the Zionist entity will be forced into an economic battle it cannot handle.

They confirm that these factors, combined, threaten the stability of the Israeli economy in the long term and pressure the enemy to take urgent measures to control the budget, after failing to protect vital sectors and maintain the confidence of local and international investors.

Financial analysts are raising alarms about Israel's economic stability, pointing to a confluence of military expenditures, a growing budget deficit, and international pressures that threaten to overwhelm the state's finances.

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