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Netanyahu says Israeli economy remains robust despite growing investor concerns

View of the Tel Aviv Stock Exchange, Nov. 29, 2020. (Photo: Miriam Alster/Flash90)

Israeli Prime Minister Benjamin Netanyahu recently downplayed growing global investor concerns about the state of the Israeli economy. 

Some Israeli and international investors have warned that the Netanyahu government’s judicial overhaul plans undermine the strength of Israel’s fundamental institutions, including an independent judiciary. However, Netanyahu dismissed these concerns as “momentary dust.” 

“Look, here’s what I think. I think the future, as I said, belongs to those who innovate. I think the momentary fluff, the momentary dust that is in the air is just that – dust. The fundamentals of the Israeli economy are very powerful,” Netanyahu stated

A new poll conducted by Start-Up National Central, a non-profit focusing on strengthening Israel’s tech industry, shows that 80% of Israeli start-ups and 84% of investors fear that the ruling coalition’s judicial reforms will have a negative impact on investor opportunities in Israel. 

Netanyahu, who previously worked for the prestigious Boston Consulting Group, is widely considered Israel’s most economy-savvy prime minister. Netanyahu served as Israel's finance minister in the early 2000s and is credited for creating a favorable economic climate for Israeli and international investments in the Jewish state’s tech industry. 

However, critics from the political opposition fear that the current Netanyahu government’s judicial reforms could undermine the viability of the Israeli economy and tech sector. 

Earlier in April, the internationally respected Moody’s Investors Service downgraded the credit outlook for the Israeli economy from positive to stable in response to the public controversy surrounding the judicial overhaul. Only in April last year, did Moody’s raise Israel’s outlook to positive. 

“While mass protests have led the government to pause the legislation and seek dialogue with the opposition, the manner in which the government has attempted to implement a wide-ranging reform without seeking broad consensus points to a weakening of institutional strength and policy predictability,” stated Moody's. 

Despite this, Moody’s kept Israel’s A1 credit rating, pointing to the country’s “strong economic growth and improving fiscal strength.”

“The Israeli economy has grown at a rapid rate over the past several years, averaging 4.1% over the decade to 2022, helped to an important extent by the globally competitive and increasingly diversified high-tech industries,” stated Moody’s report. 

The All Israel News Staff is a team of journalists in Israel.

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