Israel Defense Forces - Budget

Budget

During 1950–66, Israel spent an average of 9% of its GDP on defense. Defense expenditures increased dramatically after both the 1967 and 1973 wars. They reached a high of about 24% of GDP in the 1980s, but have since come down significantly, following the signing of peace agreements with Jordan and Egypt.

On 30 September 2009 Defense Minister Ehud Barak, Finance Minister Yuval Steinitz and Prime Minister Benjamin Netanyahu endorsed an additional NIS 1.5 billion for the defense budget to help Israel address problems regarding Iran. The budget changes came two months after Israel had approved its current two-year budget. The defense budget in 2009 stood at NIS 48.6 billion and NIS 53.2 billion for 2010 – the highest amount in Israel's history. The figure constituted 6.3% of expected gross domestic product and 15.1% of the overall budget, even before the planned NIS 1.5 billion addition.

However in 2011, the prime minister Benjamin Netanyahu reversed course and moved to make significant cuts in the defense budget in order to pay for social programs. The General Staff concluded that the armed forces endangered their battle readiness under the proposed cuts. In 2012, Israel spent $15.2 billion on its armed forces, making it the country with one the highest ratio of defense spending to GDP of the developed countries ($1,900 per person). However, the spending per capita is below that of the USA.

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