Israel posted a budget deficit of 12.1 billion shekels ($3.24 billion) in August, the Finance Ministry said, citing high expenses to finance the conflict with Hamas in Gaza, Reuters reports.

The deficit for the 12 months to August rose to 8.3 per cent of gross domestic product (GDP), from 8pc in the 12 months to July, compared to a target of 6.6pc for all of 2024.

Spending on the conflict, which began last October, has reached some 97 billion shekels.

The ministry said the deficit will continue to increase through the third quarter before moving back to its target.

Tax revenue rose 8.1pc in August is up 1.9pc over the first eight months of 2024.