Israeli Finance Minister Bezalel Smotrich has dismissed Moody's recent downgrading of Israel's credit rating, asserting that the decision, which the agency linked to the ongoing conflict with Gaza, lacks solid economic justification and serves as a pessimistic "manifesto."
In a statement released on Saturday, Smotrich affirmed, "The Israeli economy stands firm by all metrics. It possesses the resilience to support ongoing war efforts, both on the front lines and the home front, until victory, with the help of God, is achieved."
Moody's, citing significant political and fiscal risks arising from Israel's conflict with the Palestinian militant group Hamas, which has persisted since October, downgraded the country's rating to "A2" - still five notches above investment grade. Additionally, the agency maintained a negative credit outlook, indicating the possibility of further downgrades.
The agency's analysis anticipates Israel's debt burden to exceed previous projections due to the conflict, with defense expenditure potentially doubling compared to 2022 levels by the year's end under its baseline scenario.
