Israel to increase defence spending to address security threats

Israel will raise its defence spending by 42 billion shekels ($12.5 billion) this year and in 2026, the finance and defence ministries said on July 17th, due to security challenges, according to Al-Monitor via Reuters. 

The budget deal will enable the defence ministry to “advance urgent and essential procurement deals critical to national security,” according to ministries.

Finance Minister Bezalel Smotrich said the new defence budget “fully covers the intense fighting in Gaza, alongside comprehensive security preparations for all threats- from the south, the north, and more distant arenas.”

Israel’s military costs have increased since it launched its military operations on Gaza following the attacks by Hamas militants on Israel on October 7th 2023.

Since then, Israel has also engaged in combat with Hezbollah in Lebanon, conducted a 12-day aerial campaign against Iran, and launched airstrikes in Syria after pledging to dismantle government forces targeting the Druze population in southern Syria.

Notably, on June 24th, the Israeli military reported intercepting an Iranian missile. Meanwhile, Israel’s defence minister Israel Katz issued a warning of potential retaliation directly targeting Tehran.

Israel also launched airstrikes on the Eastern Bekaa Valley in Lebanon on July 15th, targeting military compounds allegedly used by Hezbollah’s elite Radwan Force for training and coordinating attacks.

In the past 21 months, Israel’s missile defence systems have been in near-constant use, intercepting missile threats launched by Hezbollah, Iran, and the Houthis in Yemen.

Currently, Israel’s annual defence budget stands at 110 billion shekels, which accounts to around 9% of its gross domestic product, from a total 2025 national budget of 756 billion shekels.

The additional funding “will allow the Defence Ministry to immediately sign procurement deals for the weapons and ammunition required to replenish depleted stocks and support the IDF’s ongoing operations,” said director general of the defence ministry, Amir Baram.

He added that it would also allow the defence establishment to begin development programmes aimed at maintaining the Israel Defence Forces’ (IDF) qualitative edge in future military systems.

Katz stated that the funding would enable Israel to prepare for various potential threats, noting that “enemies are openly declaring their intent to destroy us…For this we require complete military, technological and operational superiority.”

In a separate announcement, the Defence Ministry confirmed it had signed an agreement with the state-owned Israel Aerospace Industries (IAI) to expedite mass production of the Arrow interceptor missiles.

The Arrow system, jointly developed and produced with the U.S. Missile Defence Agency, is designed to intercept and neutralise ballistic missile threats.

The system demonstrated a high interception success rate during tensions with Hamas and Iran. Under the new agreement, IAI will provide the military with a significantly increased supply of Arrow interceptors.

“The numerous interceptions it carried out saved many lives and significantly reduced economic damage,” Baram said.

Additionally, on July 16th, the ministry finalised a $20 million contract with Israel Weapon Industries (IWI) for the procurement of advanced machine guns, aimed at substantially boosting the firepower of IDF ground forces.

Al-Monitor via Reuters, Maghrebi.org