Israel's 2025 Financial Report Reveals NIS 723 Billion Pension Liability

The Israeli Ministry of Finance has released its consolidated financial reports for 2025, detailing the state's fiscal standing. The reports indicate that Israel's assets total approximately NIS 2.167 trillion, while its liabilities amount to nearly NIS 4 trillion. The state's primary asset is its land holdings, valued at about NIS 1.138 trillion, a slight increase from the previous year. Other significant assets include fixed assets and intangibles worth around NIS 602 billion, and investments in public-private partnerships (PPP) totaling approximately NIS 53 billion.

On the liabilities side, the largest component is domestic and foreign loans, amounting to roughly NIS 1.464 trillion. This is followed by the National Insurance Institute's obligations to policyholders, totaling about NIS 1.286 trillion, and employee rights liabilities of approximately NIS 759 billion. A notable figure highlighted in the reports is the state's commitment for budgetary pensions, which stands at around NIS 723 billion at the end of 2025, up from NIS 716 billion in 2024. The increase is attributed mainly to indexation and interest, offset by pension payments.

The reports also extensively address the financial impact of the "Swords of Iron" war (referred to as "Malkhemet HaTkuma" in the source). Between 2023 and 2025, the government spent approximately NIS 231 billion on war-related expenses, including NIS 166 billion for defense, NIS 27.3 billion for compensation, and NIS 37.9 billion for rehabilitation and civilian needs. This sum excludes 2026 expenditures and lost tax revenue. The cost of benefits for victims of hostile acts has surged to about NIS 3.6 billion in 2025, with the cost of disability pensions for such victims nine times higher than before the war.

Furthermore, the reports detail government activities in housing, infrastructure, and asset management. The compensation fund has depleted significantly, with only about NIS 2.8 billion remaining after approximately NIS 37 billion was withdrawn by September 2026. Finance Minister Bezalel Smotrich stated that the reports reflect the government's strong financial position and the resilience of Israel's economy, enabling investments in growth engines, defense, and citizen welfare. Chief Accountant Michal Abadi-Boiangiu emphasized adherence to international reporting standards and the need for controlled fiscal management alongside continued investment in infrastructure, housing, and technology.