Israel's Parliament Approves 2026 Budget, Avoiding Immediate Elections

Overview of the 2026 Budget Approval

By Steven Scheer

Political Context and Coalition Dynamics

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.

Budget Details and Economic Implications

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.

Challenges Ahead for Final Approval

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)