Moody’s credit agency has lowered Israel’s credit rating from A1 to A2 with a “negative” outlook due to the instability caused by the ongoing 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, Israeli Prime Minister Benjamin Netanyahu downplayed the negative credit rating and attributed it to the current state of war with Hamas. He emphasized that Israel’s economy remains strong and that this decline is only temporary, connected to the chaos caused by the conflict. Netanyahu assured that when the war is won, ratings will go up again, and Israel’s economic strength will not be affected.
This lowered credit rating could result in increased interest rates or a weakened national currency. The ongoing military conflict with Hamas and fears of a larger conflict with Hezbollah have contributed to this historic downgrade. Despite Netanyahu’s response, which conveyed confidence in Israel’s ability to emerge successful from these challenges, many experts are concerned about the long-term effects of this decision on Israel’s economy and its ability to attract foreign investment.