Record level during Yom Kippur War (illustration)
Photo: Reuters
Defense consumption in 2009: 6% of GDP
Central Bureau of Statistics study shows sharp drop of more than 20% in defense consumption expenditures since Yom Kippur War
In 2009, Israel
devoted 6% of its gross domestic product (GDP) to defense consumption expenditures.
This expenditure includes the defense establishment's direct spending and does not take into account loss of manpower as a result of compulsory and reserve service, or the costs of building bomb shelters and the maintenance of emergency supplies for the home front population.
A study conducted by the Central Bureau of Statistics shows that since Israel's defense consumption stood at a record level – during the Yom Kippur War – the defense consumption expenditures dropped by more than 20% of the GDP.
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From 1956 to 1975, the defense consumption expenditure grew at a quick pace of 15-16% a year. In 1973 (the year of the Yom Kippur War), the defense consumption reached a record level of 31% of the GDP.
From 1976 to 1995, the defense expenditures dropped gradually, by 2-3% a year, reaching 11% of the GDP. IN 1996, an upward trend began, but since the economy experienced rapid growth those years, the defense expenditure as a percentage of the GDP continued to drop.
In 2009, the defense expenditure reached 6% of the GDP, after falling 1.5% in 2008 and 2.7% in 2009. The overall cost of defense is about 20% higher than the defense consumption expenditure. This cost reached 7.8% of the GDP in 2009 – compared to 8.4% in 2008 and 9.7% in 2000.
The overall defense cost is calculated from the defense expenditure in addition to the expenditure on building bomb shelters and maintenance of emergency supplies, in addition to the approximation of the work soldiers would do had they been civilians working in the economy and the employer provisions for the salary of reserve soldiers and charging a risk premium to the military service.
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