Israel’s money man slams Moody’s downgrade for credit worth.

February 12, 2024
1 min read

TLDR: Israel’s finance minister has criticized Moody’s decision to downgrade the country’s credit rating, calling it a “political manifesto” that is not based on serious economic claims. Moody’s lowered Israel’s rating from A1 to A2, citing concerns about the ongoing conflict in Gaza and a potential war with Hezbollah. The downgrade could make it more difficult for the government to raise money through bond sales.

In response to Moody’s announcement, Finance Minister Bezalel Smotrich expressed anger and stated that the decision reflects a lack of confidence in Israel’s security and national strength. Prime Minister Benjamin Netanyahu attributed the downgrade to the ongoing war and vowed that the rating would improve once the conflict ended.

Israeli officials are concerned that other major rating agencies will follow suit and further downgrade Israel’s outlook. This could have an impact on the country’s economy by making it harder for the government to raise funds through bond sales.

Despite these concerns, Bank of Israel Governor Amir Yaron stated that the country’s economy is resilient and already showing signs of recovery. However, Israel’s economy was already struggling before the current conflict, with concerns about governance, rising inflation, and a slowdown in tech investments weighing on the economy.

Moody’s had also raised concerns about Prime Minister Netanyahu’s proposed judicial overhaul, which attempted to weaken the powers of the country’s courts. The shelving of this plan in January was praised by Moody’s in their report.

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