Tel Aviv – Ma’an – Moody’s has downgraded Israel’s credit rating by two notches in one go, maintaining its negative outlook on the rating due to “geopolitical risks” resulting from the escalation of the conflict with Lebanon’s Hezbollah and the prediction of a long-term war.

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

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

Israel Hayom described Moody’s decision as an “economic blow” to Israel.

Fitch also downgraded Israel’s credit rating last month, maintaining its negative outlook.

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

Source: Maan News Agency