Moody’s unimpressed by Israel’s achievements in war with Iran – draws disappointment from Jerusalem economists
The decision by credit rating agency Moody’s to maintain Israel’s rating at its lowest-ever level – "Baa1 with a negative outlook" – was met with deep disappointment by top economic officials in Jerusalem.
The officials had hoped that, following the war with Iran and its perceived success, the time was right for an upgrade. This expectation stemmed from the fact that the geopolitical threat posed by Iran had long weighed heavily on Israel’s credit rating.
Moody’s, however, rejected the argument presented by Israeli economic officials. The agency stated that Israel’s defense spending is expected to surge, the war is still ongoing, and the country may slide into a period where recurring skirmishes with Iran become the norm.
For these reasons, the ratings agency projected slower economic growth and a rising debt burden.
The implication of a low credit rating for a country whose debt amounts to hundreds of billions of shekels is that it will face higher interest rates. These increased interest payments will come at the expense of education, welfare, and healthcare – ultimately impacting every citizen.
Kan.org.il is the Hebrew news website of the The Israeli Public Broadcasting Corporation
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