Israel’s parliament gave initial approval to the 2026 state budget on Thursday, providing Prime Minister Benjamin Netanyahu a temporary political reprieve and averting the immediate threat of a snap election. Lawmakers voted 62-55 in favour of the spending plan, allowing the government to move forward cautiously.
The approved draft sets total spending at 662 billion shekels ($214.43 billion), excluding debt servicing, and caps the budget deficit at 3.9% of the country’s GDP for 2026. The measure also includes an accompanying economic plan to guide government priorities over the coming year.
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Despite the initial vote, the budget still faces a challenging path to final approval. Israeli law requires parliament to pass the budget by the end of March, or the Knesset will automatically dissolve, forcing early elections that could reshape the political landscape.
Tensions within Netanyahu’s governing coalition have simmered for over two years. Disagreements stem from the recent war in Gaza, the October ceasefire, and demands from ultra-Orthodox parties seeking exemptions from mandatory military service for seminary students.
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Some ultra-Orthodox lawmakers abstained from voting, citing the pending military conscription bill. Right-wing coalition partners and opposition parties have insisted that ultra-Orthodox men must share the national defense burden, especially after heavy casualties among Israeli soldiers in Gaza and Lebanon.
The budget’s approval highlights the delicate balancing act Netanyahu must maintain within his coalition. While the measure delays an immediate election, political observers note that deep divisions could continue to influence Israel’s economic and security policies in the months ahead.