Israel has racked up a bill of $16 billion after seven months of war, leaving its budget deficit on a path to blow past this year’s target absent government action to stabilize finances.

Finance Ministry data published Thursday showed the 12-month trailing fiscal shortfall ballooned to 7% of gross domestic product as of April, higher than the government’s estimate of 6.6% for the full calendar year of 2024.

Expenditure surged almost 36% in the first four months of 2024 from the same period a year earlier, of which roughly two-thirds went toward defense outlays. Revenues were down 2.2%, mostly due to a drop in tax payments.

As the war’s financial toll grows, Israel is on track to run one of its widest budget deficits this century. The central bank has previously estimated the total cost of the conflict will reach 255 billion shekels during 2023-2025.

The spending burden is among factors keeping Israel’s currency under pressure. The shekel is down 0.6% this week at 3.72 per dollar, bringing its declines since the start of March to about 4.5% — the second-worst performance among a basket of 31 major currencies tracked by Bloomberg.

The Finance Ministry said a delay in some tax payments from April to May due to the Passover holiday contributed to a wider fiscal shortfall. Had they been made on time, the trailing deficit would have reached an estimated 6.7% of GDP.

Israel launched its military operation in Gaza following the Oct. 7 attacks by Hamas that killed 1,200 people and saw about 250 people taken captive. The retaliatory bombardment and ground offensive on the Mediterranean enclave have killed almost 35,000 Palestinians, according to the Hamas-run health ministry.

The Israeli government has prepared fiscal adjustments totaling 1.1% of GDP on both the revenue and spending sides to help fund the soaring costs — but they have yet to be approved in full.

A percentage point increase in value-added tax that will go into effect next year is the single most important measure taken so far. It’s set to generate annual revenues estimated at 0.35% of GDP.

But for now, the government is covering the bulk of its needs by borrowing, with average monthly bond sales tripling in size after the war erupted. The government has raised 206.6 billion shekels since last October in local and foreign markets.

A slowdown in debt offerings in April likely came as a result of the Passover break and after an $8 billion international bond sale in March helped meet Israel’s borrowing needs abroad.

Similarly to last year, bond sales are currently split almost evenly between local and foreign markets. The ratio is expected to shift more in favor of domestic issuance, which traditionally accounts for around 75% of Israel’s annual borrowing.

With the war’s fiscal burden on the rise, Israel has come under the scrutiny of rating companies. In February, it received its first-ever sovereign downgrade — by one notch to A2 — from Moody’s Investors Service, a decision joined by S&P Global Ratings last month.

Moody’s and S&P are both scheduled to review Israel’s debt score this week, with both maintaining a negative outlook. Fitch Ratings — which similarly to S&P has Israel at A+ — has so far left Israel’s ranking unchanged.

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