The Israeli Finance Minister attacked Moody's economists (Anatolia Agency)
Yedioth Ahronoth newspaper said that senior officials of the Ministry of Finance in Israel are seeking - in the wake of Moody's downgrading of the occupying country's credit rating - to avoid a similar action from the other two major credit rating agencies, Standard & Poor's and Fitch
.
According to the newspaper, the Israeli Accountant General, Yali Rotenberg, has scheduled meetings with senior officials of the two agencies in London this week to address their concerns.
Moody's credit rating agency lowered Israel's rating to "A2" with a negative outlook, in what media reports considered to be the first downgrade in Israel's history.
Moody's indicated a few days ago that the reason for lowering Israel's credit rating was the war on Gaza and its repercussions. The agency also expected the debt burden in Israel to rise above expectations before the war on Gaza.
The agency added that the risks of escalation of the conflict with Hezbollah still exist, which increases the possibility of a significant negative impact on the Israeli economy.
Israeli measures
According to Yedioth Ahronoth newspaper, during these meetings, Rotenberg and Israeli treasury officials will confirm that Moody’s decision was premature, and they will also highlight the proactive measures taken by the government to prevent the deficit from widening.
The measures - which Israeli officials are scheduled to review before officials of the two agencies - include planned tax increases, such as the value-added tax and the health tax, which are scheduled to be implemented in January next year.
Rotenberg also plans to hold meetings with various investors in Europe, with the aim of convincing them to invest in Israeli bonds while reassuring them that there is no risk of default, according to the newspaper.
According to economic analysts, the Accountant General will need to explain to the rating agencies and investors the confrontational language used by Finance Minister Bezalel Smotrich towards economists at Moody’s after he attacked them following the credit rating downgrade, according to the newspaper.
During an interview with Yedioth Ahronoth newspaper, Israeli Finance Minister Bezalel Smotrich supported Moody's assessment of Israel's economy, as he considered it "praising it and highlighting its flexibility and rapid recovery during the past three months," as he said.
According to a previous report by Yedioth Ahronoth newspaper, it is expected that lowering Israel's credit rating will lead to an increase in the interest rate on loans that the state is forced to obtain due to the ongoing war on the southern front and instability on the northern front.
Moody's decision will also lead to an increase in interest rates for Israeli companies and families, a possible decline in stock prices on the Tel Aviv Stock Exchange and a weakening of the shekel against foreign currencies in the near future, according to the same source.
Source: Al Jazeera + Israeli press