Moody’s Investors Service recently downgraded Israel’s credit rating for the first time ever, citing the impact of Israel’s ongoing war on the Gaza Strip. The conflict has been going on for more than 127 days and has resulted in devastating consequences for thousands of Palestinians as well as for Israel. Prime Minister Benjamin Netanyahu has claimed that Israel will win the war, but the Palestinian Resistance has reportedly caused significant damage to Israeli military vehicles and soldiers. The war has cost the Israeli government an astronomical amount of $18 billion, with daily costs reaching $220 million. Meanwhile, the Palestinian casualty count continues to rise, making the situation even more complicated.
The decision by Moody’s to lower Israel’s credit rating was due to a material increase in political risk for the country after the war. This is a significant development for Israel, a nation that has constantly boasted about its economic strength. Netanyahu claims that the decision was not due to the economy itself but rather to the ongoing conflict. However, he believes that once Israel wins the war, its credit rating will increase again.
Moody’s expects Israel’s debt burden to be higher than projected following the conflict. This could have serious implications for Israel’s economy and may lead to further financial instability in the region. The Israeli government must carefully consider how it can address this issue while also continuing to fight against terrorism and protect its citizens from harm.