Israel's economy faces rising borrowing costs and budget deficit amid ongoing war

Israel's economy is facing challenges due to the ongoing war, with rising borrowing costs and a ballooning budget deficit. The direct cost of the conflict reached 100 billion shekels ($26.3 billion) by August, and estimates suggest it could rise to 250 billion shekels by 2025. Credit ratings have been downgraded, and the cost of insuring Israel's debt is at a 12-year high. Foreign investment has decreased significantly, with non-residents holding only 8.4% of Israel's bonds as of July, down from 14.4% last year. Despite these issues, Israel has managed to raise funds, selling $8 billion in debt this year. However, local investors are seeking signs of government consolidation efforts amid rising economic pressures.