New fire in the threshing floor of the Zionist regime's economy

Ilham Mozni; International Economic Group of Fars News Agency: “Moody's doubts the ability of the current leaders of Israel to manage the day after the war, to recover from the war situation and to exit the economic crisis due to the high costs of the war, which has unprecedentedly expanded the public budget deficit.” This was stated by the Hebrew language newspaper Calcalist in a report about yesterday's decision of the American credit institution to lower the credit rating of the Zionist regime.

The media of the Zionist regime believe that the decision of the American credit institution Moody's on Friday to lower Israel's credit rating to A2 level with a negative outlook contained many messages and indicated the depth of the stormy crisis of the Israeli economy due to the war in the Gaza Strip and the increase in the accumulated deficit in the budget. Public and high debt burden in Israel.

A burning war against Israel's economy

According to these media, Moody's decision could lead to an increase in interest rates on loans that Israel is forced to receive due to the ongoing war in the southern front and security instability in the northern front.

Hebrew-language media, quoting analysts, also predicted that interest rates would become more expensive for Israeli companies and households in the near future, and that the downgrade could – even temporarily – lead to lower share prices on the Tel Aviv Stock Exchange, as well as the exchange rate. Israel (figure) will depreciate against foreign currencies in the near future.

Moody's decision comes at a time when Israel's cabinet debt reached about 1.08 trillion shekels ($294.2 billion) at the end of the third quarter of 2023, and it appears that since then it will continue to rise as a result of loans and collections. Funding for war needs increased.

According to the estimates of journalists and economic analysts, the effects of the Gaza war on Israel's credibility will last for a long time, perhaps beyond the period of the actual war, and the negative impact on Israeli institutions and public finances may be much greater.

Israel's credit rating, they stress, reflects the increased social and political risks associated with the current conflict on the southern and northern fronts, the weak security situation in Israel, the Netanyahu cabinet's reservations about continuing the war, and its ambiguous stance on the day after the war. .

Great pressure on Israel to stop the war
Yediot Aharonot newspaper's economic correspondent, Gad Lever, says that the downgrade of Israel's credit rating did not surprise the Prime Minister and the top officials of the Ministry of Finance of this regime, because they tried to prevent such a decision by the institution in contact with Moiz's economists.
This Zionist reporter added: Netanyahu was trying to convince the rating agency that Israel's economy is stable and there has never been a case in which Israel did not repay its debts on time or quickly exit an economic crisis, as with the immediate exit from The economic problems during the corona crisis showed this.
The Israeli cabinet claims that the downgrade has nothing to do with the economy, but is entirely because Israel is at war with Gaza, and in fact, Moody's decision leverages additional international pressure on Israel to end the war and cease fire, Lever said.

Gad Lever explained that the Ministry of Finance of the Zionist regime has expressed its concern about the consequences of Moody's decision and said that the other two major rating companies, Standard & Poor's and Fitch, may also change if the war in Gaza continues and the security tensions in the north escalate. Follow Moody's path to an all-out confrontation with Hezbollah, which will further negatively impact Israel's infrastructure and economy's ability to recover.

He added: It is predicted that if the performance and capabilities of Israeli institutions decrease, especially with the continued need to use financial resources for the war, Israel's credit rating will further decrease, and this in the medium term, beyond the current expectations of Moody's, the possibility of damages Increases economic or financial.

An increase in the budget deficit and a blow to Israel's image

Avi Waxman, the economic analyst of the Hebrew-language newspaper “Marker” also says that the downgrade of the credit rating is primarily a blow to Israel's image and position in the world markets, because it is still difficult to determine the extent of the consequences of this decision and its financial effects on Israel.

Waxman added: “Buying the debt bonds of any country whose rating is downgraded will become less attractive for investors, because they want a higher interest rate for their money, and if this is the case, the downgrade will make the interest rates on the Israeli government's debt higher.”

According to the Zionist analyst, the decision to downgrade will require the Israeli cabinet to increase bond issuance to finance the public budget deficit – the gap between government revenues and expenditures – which rose to 4.8 percent of GDP at the end of last January. which is the accumulated deficit in the last 12 months, while it is expected to reach 6.6% of GDP by the end of 2024.

However, the same economic analyst says: “The economic damage of the war, or at least the most likely scenario, is now in the interest rate that the cabinet has to pay by borrowing money abroad, and this worries about the issuance of tradable bonds in the capital markets between International in order to finance the activities of the cabinet and the concern about repayment of loans has intensified

deficit increase

Adrian Vilot, the correspondent of the economic newspaper Calcalist of the Zionist regime, also wrote today that the decision to lower Israel's credit rating is due to the consequences of the Gaza war on the Israeli economy and also due to the lack of a clear plan of the Israeli cabinet for the future of Gaza after the end of the war.

Saying that Moody's experts have considered the impact of political, economic and social issues in Israel on the institution's unprecedented action in downgrading its credit rating, Vilot said: This decision is another form of pressure on Israel to reach an agreement to stop the war on the Gaza front, return to Security stability and avoiding all-out confrontation with Hezbollah.

Moody's did not believe the words of Israeli financial leaders

This Zionist reporter said: From this decision, it is clear that “Moody's ability of the current leadership of Israel to manage the day after the war and recover from the war situation and exit from the economic crisis due to the high costs of the war, which has unprecedentedly expanded the public budget deficit. It is doubtful.

He added: Moody's does not believe the story of Israeli Finance Minister Bezalel Smotrich and Netanyahu who tried to convey the message that the updated budget for 2023 and 2024 is responsible and can save Israel's economy and lead it to recovery and Israel's exit. lead from the crisis.

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