Israel's credit rating gets first-ever downgrade due to Hamas conflict
In response, Israel launched air strikes and a ground offensive that have killed at least 27,947 people in Gaza, mostly women and children, according to the health ministry in the Hamas-run territory
Representational Image.
Affected by its ongoing conflict with Hamas in Gaza, Israel’s credit rating was downgraded by one notch, from A1 to A2, by US ratings agency Moody’s on Friday.
“The ongoing military conflict with Hamas, its aftermath and wider consequences materially raise political risk for Israel as well as weaken its executive and legislative institutions and its fiscal strength, for the foreseeable future,” according to a statement from Moody’s, which explained why it had taken this action.
In addition, the ratings agency downgraded Israel’s debt outlook to “negative” because of “the risk of an escalation” with the far more potent militant organization Hezbollah, which operates along Israel’s northern border in Lebanon.
Related Articles
Hamas’s unprecedented October 7 attack resulted in the deaths of about 1,160 people in Israel, mostly civilians, according to an AFP tally based on official Israeli figures.
In response, Israel launched air strikes and a ground offensive that have killed at least 27,947 people in Gaza, mostly women and children, according to the health ministry in the Hamas-run territory.
Following the attack, S&P Global Ratings lowered Israel’s credit outlook from stable to negative on risks that the Israel-Hamas conflict could broaden.
Fitch — which is the last of the big three US ratings agencies — placed Israel on negative watch over risks from the conflict.
“The weakened security environment implies higher social risk and indicates weaker executive and legislative institutions than Moody’s previously assessed,” the ratings agency said Friday in the statement explaining its decision.
“At the same time, Israel’s public finances are deteriorating and the previously projected downward trend in the public debt ratio has now reversed,” it continued.
“Moody’s expects that Israel’s debt burden will be materially higher than projected before the conflict,” it added.
(With inputs from AFP)
Join our Whatsapp channel to get the latest global news updates
also read
Knesset Speaker Amir Ohana heads to US with released hostages, families of those till in Hamas captivity
Mike Johnson is considered as one of the staunchest supporters of Israel in the US. Ohana has ensured he puts forth the right message from Israel since he has invited several Hamas hostages who have been released lately as well as their family members
Hamas makes comeback in northern Gaza, prepares for new offensive
The resurgence of Hamas in regions previously cleared by Israeli troops during the nearly four-month offensive highlights the challenges Prime Minister Benjamin Netanyahu faces in fulfilling his promise to "crush" the militant group
Iran-backed terrorists abandon positions along Iraq-Syria border, avoid phone calls after US vows revenge for Jordan
Media outlets reported that terrorists belonging to Islamic Resistance in Iraq had abandoned their positions along the Iraq-Syria border, leaving behind a skeletal crew. Reports said the move came as the US heightened reconnaissance activity