S&P Global Downgrades Israel’s Long-Term Ratings

(Reuters) – S&P Global downgraded Israel’s long-term ratings to ‘A’ from ‘A+’ on Tuesday, citing risks to the country’s economy and public finances due to the escalating conflict with the Iran-backed armed movement Hezbollah in Lebanon.

The rating agency emphasized concerns over potential security threats, including retaliatory rocket attacks against Israel, which may exacerbate the economic impact.

Peer Moody’s (NYSE:MCO) lowered the country’s credit rating two notches to ‘Baa1’ last week and warned of a possible drop to ‘junk’ if the heightened tensions with Hezbollah escalated into a full-scale conflict.

S&P remarked, “We now consider that military activity in Gaza and an upsurge in fighting along Israel’s northern border, including a ground incursion into Lebanon, could persist into 2025, with risks of retaliation against Israel.”

S&P maintained Israel’s outlook at “negative.”