The international rating agency Moody’s has already downgraded Israel’s credit rating again, this time by two levels at once: from A2 to Baa1, leaving a negative outlook.
As Israel’s main Russian-language portal Mignews.com writes, this is the lowest rating assigned to Israel since 1995, when Moody’s first began rating the country.
The reason for the collapse of the rating was the ineffective actions of the government, against the background of a growing budget deficit due to huge military spending. However, the agency stated that the forecast remains negative.
Moody’s report says Israel is unable to meet financial and economic challenges, as the escalation of armed conflict has led to the weakening of government institutions and poor governance.
The agency’s experts believe that the Israeli economy faces a long period of recovery after the current conflict. At the same time, uncertainty and high risks will hamper investment in the Israeli economy in the coming years.
In Israel itself, Moody’s decision came as an unpleasant surprise. General Accountant of the Country Yali Rotenberg He called it “excessive and unreasonable.” According to him, the rating agency incorrectly assessed the country’s current fiscal and macroeconomic indicators.
Moody’s decision to sharply downgrade the Israeli economy will likely cause the country to raise lending interest rates and increase debt servicing costs. This could lead to cuts in government spending on social services, healthcare, education and other important areas.
As reported EADailyIranian President Masoud Pezeshkian previously said that the Israeli attack on Beirut was an open war crime by the Zionist regime.
