Smotrich against the appointment of Aharon Barak: "Netanyahu did this without consulting us - this is a mistake"/Knesset Channel
"We have never had our credit rating lowered," says Professor Yaron Zelicha, Head of the School of Accounting, Economics and Financial Management at the Ono Academic College and former Accountant General.
"It didn't even happen at the height of the second intifada when we were on the brink of bankruptcy. If it didn't go down then, there's no reason for it to go down.
"Why?
Because the total government debt is very low, so there is no fear of government debt in shekels and a stable credit rating in foreign currency, because the currency balances of the Bank of Israel exceed three times the government debt in foreign currency.
"But since we don't live in a world where professional consideration prevails over other considerations and additional parameters come into play, such as government policy and on top of that how easy the government made it for the rating company to be exposed in a good way to the data I just retired."
In his words, Zelicha refers to the outlook decision of the credit rating company Moody's, which is likely to be accepted tomorrow, when the current expectation is that the country's rating will go down.
Israel's credit rating has been set since 1998 and has not decreased since that time.
In April 2023, the rating company Moody's lowered Israel's rating forecast from "positive" to "stable", against the background of the legal revolution and its consequences.
spillage
"There is no reason for the rating to go down, the total government debt is very low"/official website, -
Zelicha criticizes the government's handling of the economic situation: "I can say with certainty that the government did a bad job. They missed the opportunity to put the permanent expenditure beyond the temporary war expenses, that is, to separate the structural, permanent debt from the temporary debt arising from the war.
"Which is troubling This is the level of our current spending: the deficit in the government budget approached three percent of the GDP, which should increase after the war, because of the spending on mental health, security expenses and high interest that will increase it more.
Therefore, taking this into account, we are talking about possibly reaching 4-5 percent, and that's without the temporary deficit of the war, a sum of between 80 and 100 billion shekels, which is a very disturbing sum."
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Netanyahu and Smotrich.
"It can be said with certainty that the government did a bad job. The Minister of Finance presented a budget with only cosmetic changes"/Photo processing, Haim Tzach/L.A.M.
Regarding the proposed budget, Zelicha says that "the Minister of Finance presented a budget with only cosmetic changes that do not respond to the growth and reduction of expenses required, but make the situation more serious. He intends to raise taxes, which will cause a slowdown in the economy. Then not only does spending increase, so does the ability to carry out Deep reforms in public sector wages or changes in the budget pension do not exist, when 4-5 billion are spent on coalition funds.
"In addition, there are zero reforms related to the cost of living, and this when in such a struggle lies all the growth potential of the economy.
Our prices are 35 percent higher than in Europe and the United States, and the difference between the basic expenditure that should have been here and the high prices we pay is a tremendous unrealized growth potential.
"So if there is no lowering of the cost of living, the economy will not grow, there is no increase in tax revenues and increasing fixed expenses - all this does not reassure the credit rating companies, on the contrary. I am afraid that the Ministry of Finance has fed them too many frogs that they will not be able to swallow and I am afraid, For the first time in many years, Israel's credit rating has gone down."
More on the same topic:
Credit Rating
Moody's
War of Iron Swords
deficit
the state budget
Cost of living
taxes