In a joint statement yesterday, Prime Minister Benjamin Netanyahu and Minister of Finance Bezalel Smotrich asserted that Israel’s economy remained strong and would not be adversely affected in the longer term by the passage of the law abolishing the reasonableness standard in judicial review of ministerial and government decisions. Their statement was released before the release of the special report by credit rating agency Moody’s warning of "significant risk that political and social tensions over the issue (the judicial overhaul) will continue, with negative consequences for Israel's economy and security situation." It came in the wake of a fall of more than 3% in the Tel Aviv 35 Index of leading stocks on the Tel Aviv Stock Exchange, and a 2.68% rise in the shekel-dollar exchange rate to over NIS 3.17/$.
Netanyahu and Smotrich wrote that the negative response to the legislation by the markets yesterday was "a momentary reaction." "When the dust settles, it will become clear that the Israeli economy is very strong," the statement said. "Our defense companies are inundated with orders, the gas companies are expanding exports to Europe, and seven companies are currently bidding in tenders for gas exploration in Israel involving billions in investment, Intel plans its largest ever investment outside of the US and will invest $25 billion in Israel, Nvidia is building a supercomputer in Israel, and we are promoting artificial intelligence and production of microchips in Israel.
"The labor market is tight, growth is rising and inflation has been halted, regulation is being removed and free market competition is on the increase. The Israeli economy is based on sound foundations, and it will continue to grow under experienced leadership conducting responsible economic policy," the statement concluded.
In early trading this morning, the Tel Aviv 35 Index is up 2.1%, and the shekel-dollar exchange rate has fallen 0.64% to NIS 3.6932/$.
Published by Globes, Israel business news - en.globes.co.il - on July 26, 2023.
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