Israel's $500 billion economy was damaged during the war that has been raging for more than 4 months against Hamas in Gaza, and it also attracted thousands of Israeli workforce who joined the army.

Barkat said that national security is not only a priority, but also “a vital issue for the Israeli economy.”

The minister is widely considered a potential candidate to succeed Prime Minister Benjamin Netanyahu.

In response to a question about what the possibility of a worsening trade deficit and another downgrade of Israel’s credit rating might mean, Barkat told Reuters: “We are committed to achieving victory in the war. We will win the war no matter what.”

“I think when people look at Israel’s economy, they want to make sure first and foremost that we are a safe country,” he said, adding that Israel “has overcome more difficult situations in the past.”

The minister confirmed that Israel will borrow in the near term.

This borrowing, along with the economic impact of the war, will worsen the debt-to-GDP ratio, a measure of Israel's ability to repay its debts, from 62 to 70 percent.

But Barkat, a member of Netanyahu's Likud party, said this did not worry him.

He expected the post-war economy to grow, benefiting from the innovation boom in the high-technology sector, a major contributor to Israel's economy.