Fiscal Resilience: Israel Maintains Logistics Investment Capability Despite Conflict

The Israeli economy manages to maintain impressive financial resilience even under complex wartime challenges. The Accountant General at the Ministry of Finance, Yali Rothenberg, published the first estimate for the debt-to-GDP ratio for 2025 today, revealing that public debt amounted to 68.6% of GDP.

This represents a moderate increase of less than one percent compared to 2024, a figure indicating the state's ability to continue supporting the economy's financing needs without resorting to drastic cuts in development budgets. For the freight forwarding and logistics sectors, this stability is an encouraging sign for continued operational continuity and investment in national infrastructure.

During 2025, total gross debt fundraising stood at approximately NIS 207 billion. The critical metric for industry professionals is the average "bid-to-cover ratio" in local auctions, which stood at 4.5. This figure testifies to the very high confidence of the institutional market in Israel's financial resilience, ensuring liquidity that allows government ministries and infrastructure companies - such as the Israel Ports Company (IPC) and Israel Railways - to continue planning and executing long-term projects at ports and on central transport arteries. The budget deficit in 2025 totaled 4.7% of GDP, a level considered controllable compared to other developed nations that have experienced similar crises.

Minister of Finance Bezalel Smotrich noted that despite the increase stemming from defense expenditures, the rate of the war's impact on the debt-to-GDP ratio is moderating, and the state will persist in taking fiscal measures that balance the need for security strength with the preservation of economic stability.

The Accountant General added that the rise in Israel's debt ratio is significantly lower relative to global benchmark countries, where an average increase of approximately 1.9 GDP percentage points was recorded—more than double the local increase. This success in curbing the surge in debt is critical for preserving Israel's credit rating, which directly impacts financing costs for importers and exporters operating in international markets.

In conclusion, 2025 closes with a fiscal balance sheet that is relatively stable given the security circumstances. The Treasury's impressive fundraising ability provides the necessary "economic backing" to ensure the continuity of the national supply chain and improve the competitiveness of the business and logistics sectors.

With the stabilization of geopolitical conditions, the next challenge will be returning the fiscal track to a trajectory of consolidation, enabling a further reduction in the debt-to-GDP ratio and fortifying Israel's economic standing globally.