Gaza war brings sharp rise in Israeli defense procurements

Al-Monitor Pro Members

David Rosenberg

Israeli reporter specializing in business, economics and politics

Jan. 30, 2024

Israel’s arms exports have been growing due to a global rise in defense spending over the last several years. However, domestic defense needs in light of the Gaza war have forced Israeli defense contractors to delay for the time being fulfilling export contracts. The Calcalist financial daily recently reported that companies had postponed delivery on more than $1.5 billion in orders from global customers to meet Israel Defense Forces' domestic needs. Israel’s Defense Ministry is reported to have placed orders for more than 10 billion shekels from local companies. Procurements are expected to continue to remain high from this year forward. Although the government will need to prevent its budget deficit from widening excessively, an increasingly insecure regional situation will leave it little choice but to spend more on defense for the foreseeable future. The government is also determined to reduce its reliance on the United States for conventional munitions.