• Mon. Mar 4th, 2024

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


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

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, calling it a political move. In a statement, Smotrich emphasized that the Israeli economy is strong and has the resources to support the war effort and return to rapid economic growth.

He argued that Moody’s decision was based on a pessimistic and unfounded worldview and reflected a lack of faith in the sustainability and viability of Israel. Smotrich also criticized the agency for not recognizing terrorist organizations like Hamas and Hezbollah and for hinting that it would not have lowered the rating if Israel had accepted a proposal to stop hostilities and create a Palestinian state.

Smotrich expressed gratitude to the Ministry of Finance’s auditor general, the chairman of the Bank of Israel, and other Israeli economists for their efforts in working with rating agencies. He also made additional attacks on the agency, questioning 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 Lebanese-Israeli border, and instability within Israeli government. The report also noted strength of civil society along with negative outlook on Israel’s credit rating which implies possible downgrade in future.

The downgrade was attributed to full-scale conflict with Hezbollah, potential damage to Israeli infrastructure, weakening public institutions which may lead decrease in ratings. However, Moody’s report indicated that if government shows effectiveness in formulating policies that support economic growth after end hostilities outlook will be changed to neutral.

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