JERUSALEM

Opposition leader Yair Lapid criticized the Israeli government's economic policies on Sunday, stating that the recent downgrade of Israel's credit rating by Moody's serves as a clear indication of the country's dire economic situation.

In an interview with Israeli Public Radio, Lapid referred to Moody's decision to lower Israel's credit rating by two notches to Baa1 from A2, marking the lowest level in the agency's history for the country.

He described this downgrade as a sign of Israel's immersion in an "economic quagmire due to mismanagement."

“When Finance Minister Bezalel Smotrich claims that Moody’s downgrade is a result of the war, it should not be believed. We are mired in an economic quagmire due to mismanagement,” Lapid stated.

On Friday evening, Moody's announced the downgrade, citing significantly increased geopolitical risks that have substantial negative consequences for Israel’s creditworthiness both in the short and long term.

The new rating implies that issuing external debt will become more expensive for Israel, potentially deterring investors due to the heightened risks associated with such investments.

Addressing the recent military offensives, Lapid commented on the assassination of Hezbollah's Secretary-General Hassan Nasrallah, saying: “I am not opposed to military operations or the use of force, but there must be a decision regarding our political vision.”

He further questioned whether Israel is currently setting strategic objectives for itself, directing his inquiry toward Prime Minister Benjamin Netanyahu's government: “Why did you not do this eight months ago?”

Lapid's remarks come after the Israeli army announced the assassination of Nasrallah in an airstrike carried out by F-35 fighter jets on Friday, targeting an area in the southern Beirut suburb of Haret Hreik, a stronghold of Hezbollah. Hezbollah later confirmed the death of its leader.

Lebanese and Palestinian factions, most notably Hezbollah, have been exchanging fire daily with Israeli forces across the Blue Line since Oct. 8, 2023.

As of Saturday, the ongoing exchanges have claimed the lives of 1,673 people, including 104 children and 194 women, with 8,603 others injured, according to Lebanon’s Health Ministry.

The international community has expressed concern over Israel’s actions in Lebanon, warning that the strikes could escalate the ongoing Gaza conflict into a wider regional war.

*Writing by Ikram Kouachi in Ankara