Moody's Lowers Israel's Rating Citing Geopolitical Risks

By Stephen Nakrosis

Moody's Ratings downgraded Israel's credit ratings on Friday citing heightened geopolitical risks as the intensity of the country's fighting with Hezbollah has increased in recent days.

Israel's long-term local and foreign-currency issuer ratings were lowered to Baa1 from A2 and assigned a negative outlook.

The country's goal of returning evacuated residents back to its north will likely involve a more intense conflict, Moody's said, adding prospects for a ceasefire in Gaza have weakened and domestic political and geopolitical risks have risen.

Moody's also said it considers Israel's economy will be more durably weakened by the military conflict than previously expected. Given heightened security risks the swift and strong economic recovery that was seen after previous conflicts isn't expected.

Israel's real GDP is expected to grow 0.5% this year, Moody's said, and the company lowered expectations for growth next year to 1.5% from 4% previously.

Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

September 27, 2024 17:42 ET (21:42 GMT)

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