Moody’s downgrades Israel to ‘A2’

Credit rating agency Moody’s completed its assessment of Israel on Friday, downgrading the country’s rating from “A1” to “A2”, citing material political and fiscal risks to the country from the war with the Palestinian terror group Hamas.

“While fighting in Gaza may decrease in intensity or be interrupted, there is currently no agreement to permanently end hostilities and no agreement on a longer-term plan that would fully restore and ultimately strengthen security for Israel,” he said. Moody’s in a statement.

Israeli forces prepared for a ground attack on Hamas on Friday in the southern Gaza city of Rafah, where hundreds of thousands of people displaced by violence further north are trapped in desperate conditions.

Moody’s sent a warning to Israel shortly after the Oct. 7 massacres, just days before a scheduled rating review, that a prolonged war with Hamas could lower the country’s credit rating.

Chart showing the recession economy (credit: PIXABAY)

The October 7 massacre puts the nation and the economy in dire straits

Surprise attacks by Hamas had led to the worst escalation of violence in fifty years, raising questions not only about the humanitarian costs but also about the economic toll.

Moody’s, which would revise Israel’s rating to A1 stable, said the chances of a downgrade would depend on how the war develops.

The Israeli political scale has been threatening Israel’s credit rating for months, previously citing Netanyahu’s government and reforms.

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