Israel Braces for Possible Downgrade of Credit Rating

Prime Minister Binyamin Netanyahu and President Yitzchak Herzog both held talks with Moody’s Investor Service this week in an attempt to keep Israel’s A1+ credit rating.

The company is expected to downgrade Israel’s credit outlook due to the judicial reform. Last month, it warned that the controversial legislation could weaken institutions and negatively impact Israel’s sovereign credit profile.

Moody’s is expected to make an announcement on Friday, prompting fears over how a lowered rating would affect the country’s economy, although experts believe that Israel’s credit rating – rather than outlook – will remain the same.

In talks with Moody’s officials, Netanyahu reiterated that investing in the Israeli economy was “the safest” option and Herzog shared about the progress in the negotiations he leads to reach a broad consensus on the judicial reform.

Herzog voiced optimism this week that parties would reach a compromise on the government’s judicial reform plans, saying ongoing negotiations could lead to a “constitutional moment.”