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Strained by its ongoing war on Gaza, Israel is looking to raise taxes this year to prop up defence spending for its offensive on the Palestinian enclave.

The Israeli government is set to take on nearly $60 billion in debt in 2024, temporarily stop hiring for public sector jobs, and increase taxes to almost double its defence spending after more than four months of war in Gaza, the Financial Times has reported.

Military expenditure is set to increase 85 percent compared to pre-war spending, meaning an additional 55 billion shekels, or around $15 billion, FT says.

Among the measures is demobilising troops who joined the army following its October 7 war.

More than 300,000 reservists were called to join the military as Israel declared war, deploying most troops in and around the Gaza Strip as well as the country’s northern border with Lebanon, which has seen fierce clashes with Hezbollah.

The reservists were in addition to Israel’s active military force of 150,000, making up a significant percentage of the Israeli labour market.

Sectors such as tourism have taken a hit, as many airlines cancelled flights to Ben Gurion airport and travel warnings remain in place.

Israel'sÌýGDP shrunk by almost one-fifth in theÌýfinal quarter of 2023, compared to the three months prior, according to official figures published last week.

It was the single worst quarter for the Israeli economy in terms of GDP per capita since the opening quarter of the Covid pandemic in early 2020.

With no end in sight to the violence, Israel is searching for additional revenue sources, despite already growing anger from the public against Prime Minister Benjamin Netanyahu and his hardline government.

Financial corporation Moody’s downgraded Israel’s credit rating from 'stable' to 'negative' earlier this month, citing the impact of the ongoing Gaza war.

The downgrade was slammed by Israel’s extremist finance minister, Bezalel Smotrich, calling it "politicised and unreasonable".

Close to 30,000 people have been killed in Israeli strikes since October 7, most of them women and children, Gaza's health ministry says.

Much of the territory has been reduced to rubble, and humanitarian organisations warn that thousands more could die in the coming months due to famine and the spread of disease.