Israel Takes Another Financial Hit from Credit Ratings Agency S&P Global

October 03, 2024

3:24 PM

Reading time: 3 minutes


Ratings agency S&P Global made an unscheduled adjustment to Israel's credit rating on Tuesday, dropping it from A+ to A, saying this was prompted by a "significant increase of geopolitical and security risks around Israel." They also maintained a negative outlook on Israel, meaning the credit rating is expected to be lowered again the next time there is a scheduled adjustment.

The downgrade "reflects the fallout on Israel's economy and public finances from a worsening conflict with Hezbollah in Lebanon, including possible security threats in case of retaliatory rocket attacks against Israel," the agency explained.

It also issued an adjusted prediction for Israel's economic growth in 2024 and 2025, lowering both assessments considerably. At the same time, it increased its prediction of Israel's fiscal deficit for 2024.

The negative outlook maintained by the agency "reflects the risks to Israel's growth, public finances, and balance of payments from the intensifying conflict against Hezbollah in Lebanon, including direct security threats in case of retaliatory rocket attacks against Israel," the report added.

However, it also had some positive notes, including the fact that "Israel has historically enjoyed strong growth rates and has rebounded briskly from previous crisis."

"As we stand strongly against our enemies, we must act to create maximum certainty to the market and investors in the country and around the world, and work to approve a budget for 2025 as soon as possible," Israel's Accountant-General Yali Rothenberg said in response to the news.

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