• Thu. Feb 29th, 2024

Finance Minister Slams Moody’s for Lowering Israel’s Sovereign Credit Rating Amid Ongoing Conflict with Hezbollah

ByEditor

Feb 11, 2024
Smotrich criticizes Israel’s credit rating decline: “A handful of economists in New York are making the assessments”

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

Smotrich accused Moody’s of making a political move and expressed gratitude to the Ministry of Finance’s auditor general and other Israeli economists for their efforts in working with rating agencies. He also questioned the authority of a few economists in New York to assess the situation in Israel.

Moody’s report expressed concern about the consequences of the ongoing War of Iron Swords, military escalation on the Lebanese-Israeli border, and instability of current Israeli government. The report noted that civil society was strong but had a negative outlook on Israel’s credit rating, implying a possible downgrade in the future.

The downgrade was attributed to full-scale conflict with Hezbollah, potential damage to Israeli infrastructure, and weakening public institutions, which may lead to a decrease in ratings. However, Moody’s indicated that if the government showed effectiveness in formulating policies that support economic growth and restore security after hostilities ended, it would change its outlook from negative to neutral.

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