Bezalel Smotrich, the president of Israel’s Finance Ministry, dismissed Moody’s Investors Service decision to lower the country’s credit rating as a political statement rather than an economic assessment. The assessment was described as a political manifesto rooted in a pessimistic and unfounded geopolitical worldview, reflecting what Smotrich views as a lack of confidence in Israel’s security and national strength. He asserted that the Israeli economy is robust across multiple indicators and expressed readiness to back military efforts on multiple fronts until victory is secured.
Earlier, Moody’s had revised Israel’s long-term issuer ratings in foreign and local currencies from A1 to A2, with a negative outlook, citing the ongoing conflict between Israel and Hamas as a contributing factor. The move followed a period of heightened geopolitical tension that Moody’s described as having a material impact on the country’s credit profile. This revision underscores how geopolitical developments can influence sovereign risk assessments even when financial fundamentals remain sound, a point acknowledged by analysts monitoring risk in the region.
In the broader regional context, market observers note that Israel’s credit metrics had shown resilience in recent years, supported by substantial export activity, a diverse tech-driven economy, and a flexible labor market. Despite the current conflict, policymakers aim to maintain macroeconomic stability, safeguard essential public services, and preserve investor confidence as the state continues to confront security challenges and pursue its strategic objectives. The government’s stance emphasizes a commitment to maintaining fiscal discipline and mobilizing resources to support security operations while seeking to minimize disruption to growth and investment conditions.
Public commentary on Moody’s rating action has coincided with political rhetoric about how best to respond to security threats. While some leaders reiterate a firm stance against Hamas, others stress the importance of sustaining economic strength to ensure resources for national defense and social programs. The interplay between defense priorities and economic policy remains a central theme in discussions about Israel’s credit outlook and its appeal to international investors. Market participants and observers continue to monitor indicators such as inflation trends, government debt trajectories, and external financing conditions to gauge how the country will balance security commitments with long-term growth prospects. [Source attribution: a media report on the rating decision and subsequent commentary]