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Two million Israeli citizens now live below the poverty line, with Palestinian citizens bearing the heaviest burden of the country’s worsening economic inequality, according to a new government report.
The National Insurance Institute’s annual findings, published Thursday, reveal that 880,000 children—more than a quarter of all Israeli children—are living in poverty. The data places Israel as the second-worst performer among Organisation for Economic Co-operation and Development (OECD) member countries for child poverty rates, trailing only Costa Rica with 28 percent of children classified as poor.
Palestinian Households Hit Hardest
The report exposes stark disparities within Israeli society, with Palestinian households experiencing poverty at a rate of 37.6 percent—the highest among all demographic groups. This figure underscores the economic challenges facing the nearly two million Palestinian citizens of Israel, who represent about 20 percent of the country’s population.
Haredi Jewish families ranked second in poverty rates at 32.8 percent, highlighting how disadvantaged communities across different sectors are struggling economically. The institute noted that 65.1 percent of all poor citizens come from these marginalized populations, indicating deepening social stratification.
Economic Pressures Mount
The National Insurance Institute identified Israel’s military operations in Gaza and rising living costs as primary drivers behind the deteriorating poverty statistics. The ongoing conflict has placed significant strain on government resources while simultaneously driving up prices for basic necessities, creating a double burden for low-income families.
The cost-of-living crisis has particularly impacted families with children and elderly citizens, groups that typically rely more heavily on government support and have less flexibility to adapt to economic shocks. The concentration of poverty among children raises concerns about long-term social and economic development.
Regional Economic Implications
Israel’s poverty statistics reflect broader economic challenges across the Middle East, where conflicts and political instability have strained public finances and social services. The findings may influence regional investment patterns and economic cooperation initiatives, particularly as Gulf states increasingly engage with Israeli markets.
The data also highlights the importance of inclusive economic policies in maintaining social stability, a consideration relevant for other Middle Eastern economies managing diverse populations and competing development priorities.
Looking Forward
The report’s findings present significant policy challenges for Israeli leadership, particularly in addressing the disproportionate impact on Palestinian citizens and other disadvantaged communities. With Israel ranking among the worst OECD performers in child poverty, pressure is mounting for comprehensive social and economic reforms to reduce inequality and improve living standards across all demographic groups.
