Moody's leaves its Israel rating unchanged

Published date12 May 2024
AuthorOren Dori
Publication titleGlobes (Rishon LeZion, Israel)
In its reasons for the negative rating outlook, Moody's states: "The risk of an escalation into an outright military conflict between Israel and Iran remains, which could inflict material human and economic costs. Also, Israel's conflict with Hamas in Gaza continues and its length and outcome remain highly uncertain." The agency adds that "The consequences of the conflict in Gaza for Israel's credit profile will unfold over a period of time, potentially well beyond the period of active fighting. The negative impact on the country's institutions and public finances may prove more severe than Moody's currently assesses."

Nevertheless, Moody's retains Israel current A2 rating, saying "The rating affirmation reflects Moody's view that the current A2 rating adequately captures Israel's elevated exposure to geopolitical risks. Moody's baseline scenario involves a continuation of the conflict between Israel and Hamas and hostilities between Israel, Iran and Iranian proxies, in particular Hezbollah. Under these assumptions, Israel's key credit metrics, including the economy and public finances, are evolving as expected at the time of the downgrade to A2 on 9 February 2024."

On the positive side, Moody's mentions the recovery in...

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