Moody’s granted Israel a long grace period. On October 7, 2023, the day after the attack by Hamas, the international rating agency announced that it was reviewing the country’s rating for a downward adjustment. He gave the Jewish state four months to raise money and revise its 2023 and 2024 budgets while mobilizing. deploying more than 360,000 reservists and its infantry in Gaza. Meanwhile, the government has also buried a draconian justice reform project that has worried rating agencies for 2023.
However, Moody’s did end on Friday, February 9, after a lengthy consultation, by downgrading the country’s credit rating from A1 to A2, adding a negative outlook. In this way, the agency indicates that it has no confidence in Israel’s ability to regain its own stability and convince buyers of the debt. Of course, he recognizes the capacity of Israel’s economy and institutions to deal with the conflict, as they have done in the past. But October 7, 2023 revealed, according to the agency, Israel’s security situation “less established” than the army had previously envisaged. First, the agency highlights the deep uncertainty the government maintains about the possibility of a continuation of the conflict in Lebanon, a cease-fire in Gaza, or a post-war enclave.
“There is currently no agreement on a sustainable end to hostilities, and no agreement on a long-term plan that will fully restore and possibly strengthen Israel’s security.”The agency writes with cold and technical observation, but politically incendiary in Israel.
Such a downgrade by the rating agency is the first in the history of the country, which has continued to improve its position on this scale since the 1990s, with all agencies combined. On Friday, February 9, Israeli Finance Minister Bezalel Smotrich (of the extreme religious right) denounced Moody’s text as “Political Manifesto”. “Our national, security, social and economic strength is not derived from how the world judges us, but from a deep belief in the rightness of our path, based on a glorious past and commitment of several thousand years. An even more glorious future”, he assured in messianic accents. On the eve of taking office in December 2022, this minister promised to lead Israel to the third way, neither capitalist nor communist, but dictated by the Bible.
Source: Le Monde
Ashley Fitzgerald is a financial whiz and a writer at Run Down Bulletin. With a passion for all things economy, she provides insightful and thought-provoking coverage of the latest economic trends and events.