The Israeli economy, which has killed thousands of innocent civilians in Gaza, continues to give a negative impression. The international credit rating agency Moody's announced that the Israeli economy is at great risk due to the ongoing conflicts. While downgrading Israel's credit rating from "A2" to "Baa1", the outlook for the country's credit rating remains negative. In a statement from Moody's, it was reported that Israel's credit rating has been revised. The statement indicated that Israel's credit rating in foreign and local currency has been downgraded from "A2" to "Baa1", and the outlook for the credit rating continues to be negative. "RISK HAS REACHED VERY HIGH LEVELS"In the credit rating agency's statement, it was noted that the main reason for the downgrade is the significant intensification of geopolitical risk, reaching very high levels, which could have important negative consequences for Israel's credibility in both the short and long term. The statement mentioned that the likelihood of a ceasefire in Gaza has decreased, and that domestic political risks have increased alongside geopolitical risks. It was assessed in the statement that, in the long term, the Israeli economy is expected to weaken more permanently due to military conflict than previously anticipated. NEGATIVE PICTURE IN THE ISRAELI ECONOMYIn the statement, it was conveyed that, with increasing security risks, a rapid and strong economic recovery is no longer expected, as was the case in previous conflicts, and that the delayed and slower economic recovery will have a more permanent impact on public finances in the country. The ongoing negative outlook was emphasized to reflect Moody's view that downward risks continue. In October 2023, Moody's had placed Israel's credit rating of "A1" under review for a possible downgrade. In February, Moody's had also downgraded the country's credit rating from "A1" to "A2" and revised the rating outlook to "negative".
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