Smotrich on Moody's downgrade: Israel's financial system is robust

Minister of Finance Bezalel Smotrich gave an preliminary response final night time to the downgrade of Israel’s sovereign score by Moody’s to Baa1. In his assertion, Bezalel tries to melt the blow, and guarantees to go a finances, hinting at deliberate austerity measures, maybe in an try to ship a sign to the opposite score businesses. Notably, not like on earlier such events, Smotrich avoided making a sharply worded assault on the choice itself.

“Israel’s financial system is bearing the yoke of the longest and costliest conflict within the nation’s historical past… the Israeli financial system is a powerful financial system that even now attracts funding,” Smotrich mentioned. “With God’s assist, we will go a accountable finances with the required restraining measures, and after the victory within the conflict those that downgraded the score will restore it to the true degree of the Israeli financial system.”

In its resolution, Moody’s not solely factors to the upper dangers that the Israeli financial system faces, but additionally criticizes the federal government’s response to these dangers. “The important thing driver for the downgrade is our view that geopolitical threat has intensified considerably additional, to very excessive ranges, with materials unfavourable penalties for Israel’s creditworthiness in each the close to and long run. Long term, we contemplate that Israel’s financial system might be extra durably weakened by the navy battle than anticipated earlier,” it states in its resolution, however provides, “In our view, the numerous escalation in geopolitical threat additionally factors to diminished high quality of Israel’s establishments and governance which haven’t totally mitigated actions detrimental to the sovereign’s credit score metrics.”

Revealed by Globes, Israel enterprise information – en.globes.co.il – on September 29, 2024.

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