Moody's predicts 'Israel' inflation to jump to 6.8%, GDP growth 1.4%
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This contradicts a prediction by the Bank of Israel last week claiming that the interest rate would remain untouched at 4.75% and that inflation next year would be at 2.5% and 2.8% GDP growth.
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A sign for credit agency Moody's shown on August 13, 2010 in New York. (AP)
Rating agency Moody's predicts "Israel's" fiscal deficit will widen to 3.5% of GDP by the end of this year and increase to 7.8% in 2024.
Moody's also forecasts the occupation's inflation to soar to 6.8% in 2024 with a GDP growth of just 1.4%.
This contradicts a prediction by the Bank of Israel last week claiming that the interest rate would remain untouched at 4.75%,, and that inflation next year would be at 2.5% with 2.8% GDP growth.
Last week, Moody's also declared its intention to set "Israel's" credit rating on review for a negative downgrade, as a result of the events occurring since October 7.
With that being said, Fitch took similar action, while S&P indicated that it was cutting "Israel's" rating from positive to negative.
According to S&P, the Israeli economy is predicted to decrease by 5% in the fourth quarter of this year compared to the third, with a potential recovery in early 2024.
'Trade levels at zero'
The rating agency continued to warn against the looming risks from the attacks amid the polarization of the Israeli internal situation. Even though it presented "Israel's" solid economic situation in a positive light before October 7, things seem to be taking a different turn, and the weaknesses are overtaking the strengths.
"Israel's" leading financial media, The Marker, posted on X, "'We entered the war in a recession, and trade is currently at zero. The feeling is that everyone is in an existential war:' The second week of the war is about to end, and the second week, trade in "Israel" stands at zero, with many trying to keep their heads above water, fearing the future - and still do not know who will compensate them or when."
״נכנסנו במיתון למלחמה, יש כרגע אפס מסחר. התחושה היא שכולם במלחמה קיומית": השבוע השני למלחמה עומד להיגמר, וזה שבוע שני שאין כמעט מסחר בישראל, ורבים מנסים להישאר עם הראש מעל המים, חוששים מהעתיד לבוא - ועדיין לא יודעים מי יפצה אותם, ומתי https://t.co/VM99JpKHRs
— TheMarker (@TheMarker) October 20, 2023
Back when anti-leadership protests were happening in "Israel" in April, Moody's downgraded the occupation's economic outlook to "stable" after it was "positive" amid several crises affecting the Israeli occupation.
It said its sovereign credit rating for the Israeli occupation was "A1", which made the decrease shocking, though many financial and economic experts had warned of the decision in light of the plight of crises facing the Israeli occupation.
"The change of outlook to stable from positive reflects a deterioration of Israel’s governance, as illustrated by the recent events around the government’s proposal for overhauling the country’s judiciary," the renowned firm wrote.
