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. He emphasized that the Israeli economy is strong and has the resources to support the war effort and return to rapid economic growth.
Smotrich 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. He 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.
The report from Moody’s expressed concern about the consequences of the ongoing War of Iron Swords, the military escalation on the Lebanese-Israeli border, and the instability of the current Israeli government. The report also noted that civil society is strong but has a negative outlook on Israel’s credit rating, which may lead to a possible downgrade in the future.
The downgrade was attributed to several factors, including full-scale conflict with Hezbollah, potential damage to Israeli infrastructure, and weakening public institutions. However, if Israel showed effectiveness in formulating policies that support economic growth and restore security after hostilities end, Moody’s outlook would change to neutral.
Smotrich thanked several individuals who worked with him on this issue, including auditor generals from various countries, chairpersons from central banks around the world, economists from different regions, and even some prominent investors in New York City who were critical of this move by Moody’s.