Israel’s Finance Minister Dismisses Moody’s Downgrading
Israeli Economy Strong Despite Credit Rating Downgrade
Israeli Finance Minister Bezalel Smotrich responded to Moody’s decision to downgrade Israel’s credit rating, calling it unreasonable and politically motivated. He dismissed the decision as lacking sound economic reasoning and compared it to a pessimistic “manifesto.”
Impact of Gaza War on Israel’s Credit Rating
Moody’s downgraded Israel’s credit rating to “A2,” citing material political and fiscal risks stemming from the country’s ongoing war with the Palestinian militant group Hamas. The agency also expressed concerns about Israel’s debt burden and defense spending in light of the conflict.
Israel’s Economic Resilience in the Face of Conflict
Despite the downgrade, Smotrich emphasized the strength of the Israeli economy, stating that it is capable of sustaining war efforts on both the front line and the home front. He expressed confidence in Israel’s ability to achieve victory and weather the financial impact of the conflict.
Moody’s decision to keep the credit outlook at negative, with the possibility of further downgrades, reflects the agency’s concerns about Israel’s economic trajectory amid the ongoing war. The agency expects Israel’s debt burden to rise significantly and defense spending to nearly double by the end of the year.
While Moody’s downgrade has raised concerns about Israel’s economic outlook, the Finance Minister’s response underscores the country’s resilience and determination to overcome the challenges posed by the conflict.