Moody’s downgraded Israel’s rating to Baa1 – Business World and Economy

TEL AVIV, September 28. /TASS/. Moody’s international credit rating agency announced that it downgraded the Israeli government’s long-term local and foreign currency rating from A2 to Baa1 due to a negative outlook.

According to Moody’s, this move stems from the escalation of Israel’s conflict with the Lebanon-based Hezbollah movement.

“The main factor in the downgrade is our view that geopolitical risk has intensified significantly and reached very high levels, and this has materially negative consequences on Israel’s creditworthiness in both the near and long term. The intensity of the conflict between Israel and Hezbollah has increased significantly.” “This is in the context of Israel’s publicly stated goal of returning evacuated residents to the north of the country,” the statement said. Achieving this goal will likely involve more intense conflict. At the same time, the possibility of a ceasefire in Gaza is increasing. “It has retreated and we assess that geopolitical risks as well as domestic political risks have increased,” Moody’s said.

“The risk of a broader escalation involving Iran remains low but remains,” according to the agency.

Moody’s experts “expect real GDP growth this year to be just 0.5% and have significantly reduced our growth expectation next year to just 1.5% from the previous 4%.”

In February, Moody’s downgraded Israel’s rating from A1 to A2.