Moody’s credit agency has lowered Israel’s credit rating from A1 to A2 for the first time, with a “negative” outlook. The reason for this change is due to the instability caused by the ongoing military conflict with Hamas and concerns about a potential larger conflict against Hezbollah militias in Lebanon. This is the first time in history that Israel’s credit rating has been adjusted downward.
In response to this assessment, Israeli Prime Minister Benjamin Netanyahu downplayed the negative credit rating and attributed the decline to the current state of war with Hamas. He emphasized that despite this setback, Israel’s economy remains strong, and he expressed confidence that when the war is won, ratings will go up again.
However, this lowered credit rating might result in increased interest rates or a weakened national currency. The conflict with Hamas and fears of a larger conflict with Hezbollah have contributed to this historic downgrade. Despite Netanyahu’s optimism, it remains uncertain how long it will take for Israel to emerge from these challenges unscathed.