© Reuters. FILE PHOTO: Israeli Finance Minister Bezalel Smotrich attends an inauguration event for Israel’s new light rail line for the Tel Aviv metropolitan area, in Petah Tikva, Israel, August 17, 2023. REUTERS/Amir Cohen/File Photo
JERUSALEM (Reuters) – Israeli Finance Minister Bezalel Smotrich on Saturday brushed off a Moody’s (NYSE:) downgrading of Israel’s credit rating, saying the decision linked to the Gaza war was not based on sound economic reasoning and was tantamount to a pessimistic “manifesto”.
“The Israeli economy is strong by all measures. It is capable of sustaining all war efforts, on the front line and home front, until, with God’s help, victory is achieved,” he said in a response to the decision published on Friday.
Citing material political and fiscal risks for Israel from its war with the Palestinian militant group Hamas, raging since October, Moody’s cut the country’s rating to “A2”, which is five
notches above investment grade, while its credit outlook was
kept at negative, meaning a further downgrade is possible.
The agency said it expects Israel’s debt burden to be “materially higher” than projected before the conflict and defence spending to be nearly double the level of 2022 by the end of this year in its baseline scenario.