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As usual, Israel was at the center of the world’s attention in one way or another during the month of May. Its Startup Nation high tech sector moved ahead, even with certain problems resulting from the continuing worldwide economic crisis alongside ongoing local Israeli political turmoil. And there was another flare-up in the country’s ongoing war against terrorist groups based in Gaza.
In the middle of May, Standard & Poor’s (S&P) left Israel’s credit rating unchanged at AA-. The move came after speculation that Israel’s current political upheavals – specifically the controversial judicial reforms proposed by the government of Prime Minister Benjamin Netanyahu – could cause such agencies to lose confidence in Israel’s economic outlook.
In its assessment of the rating, S&P said Israel’s “resilient economy, strong balance of payments, and a moderate level of public debt,” were factors in its decision to leave Israel’s AA- rating unchanged.
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And right after that, The International Monetary Fund (IMF) released its report on the outlook for Israel’s economy. While giving the country a good review overall, the IMF joined the chorus of those who say the controversial judicial reforms proposed by the government of Benjamin Netanyahu could bring the country’s economy down.
What is more, in May a new report from the Israel Innovation Authority and SNPI Policy Institute – the 2022-2023 Human Capital update for the high-tech sector in Israel – was released. The report showed that the country has seen a considerable slowdown in growth since its world-leading growth rates after the end of the Covid crisis. This is attributed to global trends and an ongoing financial crisis coupled with high inflation.
On the bright side, there will still be growth – just less – and there are some sectors of Israel Startup Nation bucking the trends.
But the worst news for Israel Startup Nation came at the start of May when the Israel Innovation Authority’s research wing presented a position paper that it prepared on the subject to Israel’s Minister for Innovation, Science and Technology Ofir Akunis. The paper provided an up-to-date picture of Israeli hi-tech against the background of recent events in the global and Israeli economy. It also analyzed the current and future macro-economic environment, and its influence on the hi-tech industry, as well as the influence of the uncertainty in relation to the local circumstances.
The report basically said that global trends are putting the Israeli high-tech sector at risk of breaking apart.
And the biggest news story from Israel in the month of May was obviously the IDF’s “Operation Shield and Arrow,” a campaign to take out Islamic Jihad leaders and destroy its infrastructure in Gaza. The attacks came a week after Islamic Jihad launched more than 100 rockets from bases in Gaza directed at civilian targets in Israel.
The IDF called it Operation “Shield and Arrow” because it was an operation of “defense and attack.”
During the operation, the IDF said it succeeded in eliminating five different Islamic Jihad leaders and destroying dozens of targets.
During the campaign Islamic Jihad launched almost 1,500 rockets and missiles out of Gaza that were directed at civilian areas in Israel.
