Moody’s, the credit rating agency, announced that it intends to lower Israel’s credit rating in a painful blow to its economy, amid a warning that the comprehensive conflict in the region would lead to “credit consequences” for Israeli debt issuers.
This comes about a month after Moody’s warned that a comprehensive military conflict between Israel and Lebanese Hezbollah or Iran could lead to “credit consequences” for Israeli debt issuers.
Moody’s said in a statement: “We continue to assume that the ongoing tension will not escalate into a full-scale military conflict between the two sides or extend to include Iran, and this will limit the immediate negative credit impact on the region.”
Last February, Moody’s lowered Israel’s credit rating to “A2” with a negative outlook.
Moody’s said that the reason for lowering Israel’s credit rating was 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.
Recently, the Israeli economic platform Calcalist said that there are expectations indicating that Moody’s is preparing to lower Israel’s credit rating again, which may push the Israeli economy into a deeper state of financial uncertainty.
If this reduction is achieved, investors will likely re-evaluate the quality of Israeli debt more cautiously, the platform said, which could reduce their exposure and reduce risks.
Calcalist points out that this scenario will force the government to raise unprecedented sums, which will further exacerbate the already fragile financial situation.
The platform states that there is a real possibility that Israel’s rating will be lowered from “A2” to “A3”, or even to “Baa1”, and this indicates a transition of the rating from the “medium high” category. ” to “low average” in investment quality.
Last updated: September 27, 2024 – 14:28
Suggest a correction
2024-09-29 07:58:26