Reuters / April 20, 2023
JERUSALEM – Israeli Prime Minister Benjamin Netanyahu dismissed jitters over his government’s judicial overhaul drive that have scared away some investors, calling it an opportunity to make money by betting on what he described as sound economic fundamentals.
“The momentary fluff, the momentary dust that is in the air is just that – dust,” he told U.S. business broadcaster CNBC late on Wednesday, responding to a question about falling investment by citing strong growth and a low deficit.
“The smart money moves in because they know that the fundamentals are great,” Netanyahu said. “The less smart money moves with the herd … so those who come in now and are coming in now are going to make a lot of money.”
Netanyahu’s government’s plan to limit Supreme Court powers has triggered unprecedented protests nationwide, drawn rebuke from Western allies and scared away some investors. He suspended the judicial push on March 27 to negotiate with the opposition.
On Friday, Moody’s Investors Service reaffirmed Israel’s A1 rating but revised its outlook from positive to stable, citing the judicial drive. Israel’s shekel is near a three-year low and economic growth is forecast to slow to 2.5% this year from 6.5% in 2022.
According to the IVC Research Center and LeumiTech, Israeli high-tech firms raised $1.7 billion in 2023 first quarter, down 70% from the $5.8 billion in the first three months of 2022 and its lowest quarterly fundraising level in four years.
A survey by Start-Up Nation Central found that 84% of investors believe the judicial changes will have a negative effect on ability to raise capital abroad, while 79% of companies currently raising capital have reported cancellations of meetings with investors.
Israel’s high-tech community, usually quiet on politics, has been vocal about potential damage to the economy. The tech sector contributes 25% to the country’s tax income.
Reporting by Maayan Lubell and Steven Scheer; writing by Maayan Lubell; editing by Peter Graff
