Israel to Increase Defense Budget by $12.5 Billion Amid Multifront War

Latest Developments

Defense Budget Increase: Israel will increase its defense spending by $12.5 billion, according to an announcement from the country’s ministries of finance and defense. The supplement was agreed upon following Israel’s 12-day air campaign against Iran in June, as well as its ongoing campaigns in Gaza and the West Bank. In a joint statement, the two ministries said that the budget allocation will allow Israel to “advance urgent and essential procurement deals critical to national security.”
Costs of War: As part of the agreement between the two ministries, Israel will purchase more Arrow interceptors from Israel Aerospace Industries (IAI), which were heavily relied upon to counter the approximately 500 Iranian ballistic missiles launched toward Israel in June. Amir Baram, the director general of the Defense Ministry, stated, “Accelerating the production rate of the Arrow and other critical systems is a central component of the ministry’s strategy to expand production capabilities and improve operational readiness for the continuation of the war and future campaigns.” Israel’s total military spending increased to about $47 billion in 2024, an increase of 65 percent from 2023.
Preparing for All Contingencies: Defense Minister Israel Katz said that the increased defense budget would allow Israel to prepare for future conflicts on multiple fronts. Israel’s “enemies are openly declaring their intent to destroy us … For this we require complete military, technological and operational superiority,” he stated. Along with its deal with IAI, the Ministry of Defense also signed a deal worth $20 million with Israel Weapons Industries (IWI) to produce advanced machine guns for IDF ground troops.

FDD Expert Response

“The underlying thinking is quite clear: Many of Israel’s enemies have been damaged significantly, but they will recover and continue to be a threat. To maintain its strategic edge, Israel must continue to innovate and prepare for both foreseeable and unforeseeable security challenges. Achieving this will require substantial financial investment to ensure the Jewish state is equipped to counter evolving and emerging threats effectively.” — Joe Truzman, Senior Research Analyst and Editor at FDD’s Long War Journal

“By significantly increasing its military budget, Israel is demonstrating how a democracy can facilitate significant defense spending while maintaining a healthy economy. As the Axis of Aggressors — China, Russia, and Iran — continue to sow chaos, it is critical that our Western allies focus on increasing defense spending as Israel has done in order to face the threats of our time.” — Enia Krivine, Senior Director of FDD’s Israel Program and National Security Network