Moody's downgrades Israel's credit rating
International credit rating agency Moody's has downgraded Israel's credit rating from "A2" to "Baa1," while maintaining a negative outlook for the country's credit rating. A statement from Moody's announced that Israel's credit rating had been revised.
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The statement reported that Israel's foreign and local currency credit ratings were downgraded from "A2" to "Baa1," and that the credit rating outlook remains negative.
In its statement, the credit rating agency noted that the primary reason for the downgrade is the significant intensification of geopolitical risk, which has reached very high levels and is creating significant negative consequences for Israel's creditworthiness in both the near and long term.
The statement indicated that the likelihood of a ceasefire in Gaza has diminished and that domestic political risks have increased alongside geopolitical risks.
The statement reported that, in the long term, it is assessed that the Israeli economy will be weakened by the military conflict in a more permanent manner than previously expected.
The statement further noted that, due to rising security risks, a rapid and strong economic recovery—as seen in previous conflicts—is no longer expected, pointing out that a delayed and slower economic recovery will have a more lasting impact on the country's public finances.
The statement emphasized that the ongoing negative outlook reflects Moody's view that downside risks persist.
In October 2023, Moody's had placed Israel's "A1" credit rating under review for a possible downgrade.
In February, Moody's downgraded the country's credit rating from "A1" to "A2" and revised its rating outlook to "negative."