Israeli Finance Minister Bezalel Smotrich has brushed off Moody’s downgrading of Israel’s credit rating, saying the decision linked to the Gaza campaign was not based on sound economic reasoning and was tantamount to a pessimistic “manifesto”, Reuters reports.

“The Israeli economy is strong by all measures. It is capable of sustaining all war efforts, on the front line and home front, until, with God’s help, victory is achieved,” he said in a response to the decision.

Citing material political and fiscal risks for Israel from its fighting with Hamas, raging since October, Moody’s cut the country’s rating to “A2”, which is five notches above investment grade, while its credit outlook was kept at negative, meaning a further downgrade is possible.

The agency said it expects Israel’s debt burden to be “materially higher” than projected before the conflict and defence spending to be nearly double the level of 2022 by the end of this year in its baseline scenario.