Israel’s Smotrich brushes off worries about stumbling economy, touts judicial overhaul to ‘boost growth’
Israel’s Finance Minister, Bezalel Smotrich, downplayed Moody’s decision to cut the outlook for Israel’s sovereign credit rating, stating it was “not a big drama.” He also expressed confidence that the government’s proposed overhaul of the judiciary would have positive effects on the economy.
Moody’s Investors Service has revised Israel’s outlook from positive to stable, citing concerns that the proposed reforms may have a negative impact on the country’s institutions. Despite this adjustment, Israel’s sovereign credit rating remains steady at “A1”.
Israel’s conservative government is pushing for reforms that would increase politicians’ influence in selecting judges and curtail the Supreme Court’s authority to overturn laws, leading to widespread protests.
Prime Minister Benjamin Netanyahu, under pressure at home and abroad, has agreed to delay the overhaul to try to negotiate a middle ground, but demonstrations have continued.
Smotrich told a session of parliament’s finance committee during a debate on the 2023-24 state budget that Israel’s credit outlook was lowered in 2020, but raised in 2022.
“I take the opinion seriously but it’s not big drama,” he said, noting Moody’s had also pointed to a strong economy.
Smotrich, who leads the extreme-right Religious Zionism bloc, said he did not “think economists are great experts on the judicial issue,” and that any damage to the economy would come from the campaigns against the overhaul.
He said the overhaul plan will bolster Israel’s economy.
Data published on Sunday showed that the economy grew an annualised 5.3 percent in the fourth quarter from the prior three months, versus a prior estimate of 5.6 percent. Israel’s economy grew 6.5 percent in 2022 but the Bank of Israel foresees 2.5 percent growth this year.
On the heels of Moody’s action, Israeli government bond prices were down as much as 0.9 percent, while Tel Aviv share indexes were down 0.2 percent. The shekel doesn’t trade on Sundays but it weakened 0.7 percent versus the dollar in New York on Friday.
