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“When the dust settles, it will become clear that Israel’s economy is very strong,” say Prime Minister Netanyahu and Finance Minister Smotrich following statements by Morgan Stanley and Moody’s.
By United with Israel Staff, Gil Tanenbaum/TPS and Calcalist
Israeli Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich emphasized they were unconcerned after international credit ratings agencies issued warnings about the Israeli economy following the Knesset’s passage of the controversial “Reasonableness Bill,” which limits the ability of judges to rule on cases based on personal standards of “reasonableness.”
In a joint statement, the Israeli ministers called the announcements “a momentary reaction.”
“When the dust settles, it will become clear that Israel’s economy is very strong,” they said, according to TPS.
The two went on to state that Israel’s defense industries are “bursting with orders” and that the country’s gas industry is increasing exports to Europe while seven companies are currently competing for tenders for gas exploration in Israel with an investment of billions.
They also noted that Intel is planning to invest $25 billion in Israel and Nvidia is building a supercomputer in in the country.
“Israel’s economy is based on solid foundations and will continue to grow under experienced leadership that leads a responsible economic policy,” Netanyahu and Smotrich added.
On Tuesday, Morgan Stanley cut Israel sovereign credit to a “dislike stance” after the Knesset passed the bill.
“We see increased uncertainty about the economic outlook in the coming months and risks becoming skewed to our adverse scenario,” Morgan Stanley’s analysts said in a research note.
“Markets are now likely to extrapolate the future policy path and we move Israel sovereign credit to a ‘dislike stance’.”
Later in the day, Moody’s warned that there is “a significant risk that political and social tensions over the [judicial reform] will continue, with negative consequences for Israel’s economy and security situation.”
“The wide-ranging nature of the government’s proposals could materially weaken the judiciary’s independence and disrupt effective checks and balances between the various branches of government, which are important aspects of strong institutions,” the credit rating agency wrote in its announcement that was made outside of its standard schedule for rating updates. “The executive and legislative institutions have become less predictable and more willing to create significant risks to economic and social stability.”
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