Moody’s lowers Israel’s credit rating by two notches Economy News

Moody’s lowered Israel’s credit rating by two notches in one go, and maintained its negative rating outlook due to “geopolitical risks” resulting from the escalation of the conflict with Lebanese Hezbollah and the prediction of a long-term war.

The agency decided to lower the rating from A2 to Baa1, which is its second downgrade of Israel’s rating this year.

Moody’s said in a statement, “The main driver behind the downgrade is our belief that geopolitical risks have worsened significantly to very high levels, which portends material negative consequences for Israel’s creditworthiness in the near and long term.”

The newspaper “Israel Today” described Moody’s decision as an “economic blow” to Israel.

Fitch also lowered its credit rating for Israel last month, and maintained its negative rating outlook.

Last February, Moody’s lowered its credit rating for Israel, attributing this to the war on the Gaza Strip and its repercussions. The agency also expected the debt burden in Israel to rise above expectations before the war on Gaza.