Israel Turmoil Threatens Investment, Growth

Israel's economy may face ratings downgrades, falling foreign investment and a weaker tech sector if turmoil arising from the government's contentious judicial reforms continues, investors and analysts warn, Libby George and Marc Jones reported for Reuters.

Photo Insert: The government rammed through the first of a series of laws on Monday aimed at neutering the powers of Israel's Supreme Court in favor of Prime Minister Benjamin Netanyahu's executive branch.

The government rammed through the first of a series of laws on Monday aimed at neutering the powers of Israel's Supreme Court in favor of Prime Minister Benjamin Netanyahu's executive branch.

The move sparked widespread protests, with workers from doctors to tech firms downing tools and taking to the streets.

The shekel currency has fallen more than 2% versus the dollar in the days since, taking its decline since the plans first emerged in January to more than 9%.

"The main issue for external investors looking at Israel at the moment is just the uncertainty," said Hamish Kinnear, senior Middle East and North Africa analyst at Verisk Maplecroft.

"There is no clear endpoint. While that remains the case, this is going to be a question mark hanging over Israel's economy."

Israel's stock market has also badly underperformed amidst the uncertainty, with MSCI's Israel index lagging the main global stock indices, such as the MSCI All Country World, by around 14% as domestic investors shunned the market.

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