Gallant’s firing adds to Israel’s economic woes – analysis
As Israel’s debt grows, Gallant’s firing sends a troubling message to investors amid credit downgrades.
One of the many implications of Prime Minister Benjamin Netanyahu’s dramatic firing of Defense Minister Yoav Gallant during the US presidential election on Tuesday is the concerning economic signal it sends.
As War has slammed the country’s economy, Israel has been fighting to maintain its image as a good place for investors to put their money. Growth has slowed dramatically, the country’s debt has swelled, and the government has floundered in its attempts to legislate and enact countermeasures. Global concerns about the economic impacts of the war and its implications for the economy have been reflected in downgrades of Israel’s sovereign rating by all of the Big Three credit rating agencies.
The firing of Gallant projects instability at a time when Israel must project stability to investors. In some sense, it is an affirmation that the priorities of Israel’s political echelon put the coalition’s stability ahead of all else. These signals are the opposite of those Israel wants to send to investors and economic professionals at this time.
Gallant's firing reinforces growing risks
In justifying its September downgrade of Israel to the country’s lowest-ever credit rating, Moody’s noted that “indications of higher domestic risks include tensions between the government and security services” and highlighted the delay of the haredim (ultra-Orthodox) draft bill as another source of domestic risk.
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