The decision by Moody's to deliver Israel's first credit rating downgrade in its history late last week is a warning sign to policymakers that the strength of the public finances should not be taken for granted and that fiscal tightening is still needed in the coming years. Elsewhere, Turkey's balance of payments figures released for December this week showed a further narrowing of the current account deficit, providing further evidence that the policy tightening since the middle of last year has continued to rebalance the economy.
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