The rating agency Moody’s adjusted Israel’s rating with a negative outlook on its credit capacity, lowering its grade from A1 to A2. from stable to negative, highlighting the “risk of escalation” with Hezbollah as a key factor in this review.
According to a statement, Moody’s warns that the “ongoing military conflict with Hamas and its broader consequences, which materially raise the political risk for Israel and weaken the Executive, the legislative institutions and its fiscal strength in the short term future“.
The rating agency highlighted that the “risk of escalation” of military operations in the north of that country was one of the factors taken into account for this observation.
After the rating was released, Israeli Prime Minister Benjamin Netanyahu He stated that Israel’s economy remains strong and that the downgrade of the rating is not related to the economic situation, but rather to the state of war in the country, the media stated. The Jerusalem Post.
“Israel’s economy is strong. The rating downgrade is not connected to the economy but it is entirely due to the fact that we are at war. When we win the war the ratings will go up again,” she noted.
Israel’s Finance Minister, Bezalel Smotrich, also rejected what was stated by the rating agency and said that this was a “political manifesto” lacking solid economic foundations.
In a statement issued from his office, Smotrich expressed concern that this action reflects a lack of confidence in security and the national strength of Israel, as well as the direction taken by the country against its enemies.
Israel’s low rating is the first since 1998, when Moody’s began evaluating the country, and one of the repercussions could be devaluation of its national currency and the increase in interest rates.