Published by Global Banking & Finance Review®
Posted on January 29, 2026
2 min readLast updated: January 29, 2026
Israel's parliament approved the 2026 budget draft, avoiding immediate elections. The budget faces challenges amid coalition tensions.
By Steven Scheer
JERUSALEM, Jan 29 (Reuters) - Israel's parliament gave initial approval to the 2026 state budget draft on Thursday, handing Prime Minister Benjamin Netanyahu a temporary political reprieve by averting the immediate prospect of an early election.
Lawmakers voted 62-55 in favor of the spending plan, which totals 662 billion shekels ($214.43 billion), excluding debt servicing, and sets a budget deficit ceiling of 3.9% of gross domestic product this year.
The budget, as well as an accompanying economic plan, still faces a difficult path to final approval amid deepening polarisation within Netanyahu's governing coalition. Under Israeli law, the budget must be passed by the end of March or parliament would automatically dissolve, triggering a snap election.
Tensions inside the coalition have simmered for more than two years, fuelled by disagreements over the war in Gaza, the ceasefire reached in October that halted the fighting, and demands by ultra-Orthodox Jewish parties for legislation exempting religious seminary students from mandatory military service.
Some ultra-Orthodox lawmakers did not vote in favour of the budget since a military conscription bill has not yet been approved.
Netanyahu's other right-wing coalition partners - as well as opposition parties - argue that ultra-Orthodox men must share the burden of military service, particularly after two years of fighting in Gaza and Lebanon in which nearly 1,000 Israeli soldiers were killed.
($1 = 3.0872 shekels)
(Reporting by Emily RoseEditing by Ros Russell)
The main topic is the initial approval of Israel's 2026 budget by parliament, which avoids a snap election.
The budget totals 662 billion shekels, with a deficit ceiling of 3.9% of GDP, excluding debt servicing.
The budget faces challenges due to coalition tensions over military service exemptions and other political disagreements.
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