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Israel’s Credit Rating Decline: Smotrich Suggests New York Economists Are Making Assessments from Afar

ByEditor

Feb 11, 2024

Finance Minister Bezalel Smotrich criticized the decision of the international rating agency Moody’s to lower Israel’s sovereign credit rating for the first time in history, calling it political. In an official statement, Smotrich stated that the Israeli economy is strong and has the resources to support the war effort and return to rapid economic growth.

According to the minister, Moody’s decision is politically motivated and lacks serious economic arguments. He believes that the decision reflects a lack of faith in the sustainability and viability of Israel and shows uncertainty about the country’s path in fighting its enemies.

Smotrich emphasized that Israel’s strength comes from a deep belief in its path and commitment to ensuring a glorious future, and that Moody’s statement will not weaken the country in the war for independence and sovereignty.

Later, on a television program, Smotrich made additional attacks on the agency, criticizing its assessment of why Israel has not created a Palestinian state or declared a truce.

Moody’s decision to downgrade Israel’s credit rating was based on concerns about the consequences of the ongoing war in Gaza, military escalation on the Lebanese-Israeli border, and the instability of the current Israeli government. The report also notes the strength of civil society but expresses concern about the potential for a full-scale conflict with Hezbollah and a weakening of public institutions.

Despite the downgrade, Moody’s did not rule out the possibility of an upgrade in the rating if the government formulates policies that support economic growth and restores security after the end of hostilities. However, the agency also warned that an escalation of the situation on the northern border or a weakening of public institutions could lead to further downgrades in the future.

By Editor

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