Israeli Warning on Debt Policy Risks

Israel is facing a fundamental economic crisis due to rising public debt and deteriorating financial conditions, especially with increased military spending that has exceeded 8% of its GDP, alongside a downgrade of the country's credit rating. Reports warn that the government's debt policies could lead to a prolonged economic crisis similar to the "Lost Decade" after the October 1973 war, during which the debt-to-GDP ratio rose to more than 150%. Experts emphasize that these policies threaten Israel's economic stability, deepen social disparities, and weaken the ability to invest and service debt—particularly as war costs increase and credit ratings decline.

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