According to the index, Israelis received a score of 63.9 in 2023, compared to 65.7 and 66.8 in 2022 and 2021, respectively. (Shutterstock)

Israelis' financial flexibility in 2023 declined for the third year in a row, according to an index compiled by financial education non-profit Pamonim and published this week, as the ongoing war in the Gaza Strip affected the well-being of Israeli families, as well as an increase in overdrafts.

The Jerusalem Post newspaper said that the index - which evaluates financial flexibility on a scale from 1 to 100 - revealed that Israelis received a score of 63.9 points in 2023, compared to 65.7 and 66.8, respectively, in 2022 and 2021, respectively.

According to the newspaper, this decline is due to several main factors. An important factor contributing to the decline was the increase in the number of Israelis facing continuous overdrafts on their bank accounts.

The survey found that 24% of respondents reported persistently overdrawn accounts in 2023, which is up from 20% the previous year.

Moreover, the index shows - according to the newspaper - that an increasing percentage of Israelis neglect saving for the future, as 27% of participants in 2023 admitted this, compared to 21% in 2022.

In addition, a steady increase has been observed in the difficulty Israelis face in managing unexpected expenditure incidents, with 40% reporting difficulties in this regard in 2023, up from 36% in 2022.

The criteria on which the index was based include the family’s ability to deal with a family income shock, the family’s ability to deal with a family spending shock, monthly family savings, a sense of financial competence, and the ability to cover monthly expenses.

The repercussions of these financial pressures were evident in the daily lives of many Israelis, a large portion of whom reported forgoing basic services due to financial constraints.

The newspaper indicates that 47% of participants indicated - for example - that they cannot afford dental treatment in 2023, which represents a significant increase from 31% in the previous year.

Likewise, 35% reported that they had given up visiting the doctor, compared to 25% in 2022, while 31% admitted that they were unable to purchase necessary medications, compared to 24% in 2022.

Pamonim CEO Zvika Goldberg called for urgent action, calling for the implementation of a national plan to address deteriorating financial behavior among Israelis.

Goldberg stressed the importance of addressing this issue, noting that an increasing number of families have become financially fragile and lack stability and security.

Goldberg also highlighted the impact of external factors, such as the ongoing war, on the economic well-being of Israeli families, noting that the survey results revealed a negative economic impact resulting from the prevailing conditions.

The Israeli fiscal deficit widened to reach 4.8% of GDP at the end of last January (Getty)

The Israeli fiscal deficit widened, reaching 4.8% of GDP at the end of last January, representing an increase of 0.6% compared to the previous month, according to a previous report by the Israeli newspaper Globes.

The fiscal deficit - which represents the gap between government revenues and expenditures - reached 89.1 billion shekels ($24.24 billion) in the 12 months preceding the end of last January.

Israel's economy shrank by 19.4% on an annual basis in the fourth quarter of last year, affected by the war waged by the occupation in the Gaza Strip.

The Israeli Bureau of Statistics stated that the contraction recorded in the last quarter was driven by the deterioration of all sectors, at a time when the level of investment declined by 70%.

Source: Jerusalem Post