S&P downgrades Israel’s credit rating 'given the recent escalation of fighting' and 'security risks for Israel'
S&P Global downgraded Israel’s credit rating from A+ to A on Wednesday, citing the ongoing and escalating conflicts in the region as the reason for the change.
“We see an increasing likelihood that Israel’s conflict with Hezbollah, given the recent escalation of fighting, becomes more protracted and intensifies, posing security risks for Israel," S&P stated.
“The company believes that the fighting in Gaza and the escalation in fighting on the northern border, with the possibility of a ground operation in Lebanon, might continue into 2025 with a risk of a response against the State of Israel.”
In light of these developments, the agency stated that it “expects a delayed economic recovery in Israel and revises downwards the real growth forecast to 0% in 2024, 2.2% in 2025 together with the widening of the fiscal deficit in the short to medium term as defense related spending increases even further."
S&P was scheduled to decide on Nov. 8 but said the decision was pushed forward “due to the significant rise in Israel’s geopolitical and security risks.”
The decision of S&P to lower Israel’s credit rating marks it as the third of the “Big Three” global credit rating agencies to downgrade Israel’s rating recently.
Fitch downgraded Israel’s rating in mid-August, similarly lowering it from A+ to A.
Last week, Moody lowered Israel’s score from A2 to Baa1, stating that “the significant escalation in geopolitical risk also points to diminished quality of Israel’s institutions and governance which have not fully mitigated actions detrimental to the sovereign’s credit metrics.”
The All Israel News Staff is a team of journalists in Israel.
