Egypt Daily News – Moody’s credit rating agency criticized the current policies of the Israeli government, warning that they will cause an economic slowdown even if the war stops.
The first vice president of the credit rating agency, Katherine Mohrbrunner, said in an online conference to clarify her recent decision to downgrade Israel’s credit rating that the absence of a clear strategy to exit the current war is one of the main factors that led to the downgrade decision.
“The current situation does not provide the required certainty for investment and stable economic growth,” she emphasized, noting that economic recovery in Israel will be slow and complicated, unlike previous conflicts.
Regarding the internal political risks in Moody’s analysis, Muhlbronner explained that the current actions of the Israeli government are exacerbating social tensions and could harm international support for Israel.
She specifically pointed out the tension resulting from the actions of the settlers, the attempts to undermine the independence of the judicial system, and the delay in passing the conscription law for the religious.
On the economic front, Moody’s presented concerning forecasts for the Israeli economy, as the agency significantly lowered its growth forecast for 2025 to 1.5%, a sharp decline from its previous forecast of 4%. Additionally, long-term growth expectations were reduced from 4% to 3% annually.
The First Vice President of Moody’s credit rating agency, Catherine Mohrbrunner, expressed her concern about Israel’s financial situation, estimating that the deficit in 2025 will be 2% higher than the government’s announced target, reaching 6% of GDP, due to weak economic growth and doubts about the government’s full implementation of the proposed measures to achieve financial savings.
As a result, Israeli government debt is expected to reach 70% of GDP in the coming years, which is significantly higher than previous estimates.
Moehlbronner reiterated her doubts about a quick return to the security and economic situation that Israel had in the past, emphasizing that the challenges this time seem greater and more complex.
Moody’s had downgraded Israel’s credit rating by two notches to Baa1 with a negative outlook.
