S&P lowers Israel’s rating due to the dangers of war
The war in Gaza also has significant financial consequences for Israel, as does this moment of great uncertainty.
S&P Global Ratings lowered Israel's long-term sovereign rating to 'A+' from 'AA-' and maintained a negative outlook for April 18, 2024, saying the recent increase in confrontation with Iran increases geopolitical risks already high for Israel. Here is the rating from the two main agencies:
The agency noted that the war between Israel and Hamas and the confrontation with Hezbollah look set to continue through 2024, in contrast to its previous assumption of military activity of no more than six months.
While it does not foresee a broader regional conflict as a primary scenario, S&P warned that such an event could significantly worsen Israel's security situation, affecting its economy, fiscal health and balance of payments metrics.
The agency also added that if the conflict in the Middle East were to escalate, Israel's rating would be further downgraded. The problem is simple: already with this current partial mobilization the economy has problems, let's imagine what would happen if the whole of Israel was mobilized in view of a broader conflict.
For these reasons, Moody's latest rating for Israel was set at A2 with a negative outlook. Fitch's credit rating for Israel was last reported at A+ with a negative outlook, just like the other two agencies. War, even at low intensity, is a factor of strong insecurity.
In general, credit ratings are used by sovereign wealth funds, pension funds and other investors to assess Israel's creditworthiness, thus having a strong impact on the country's borrowing costs. This page includes Israel's public debt ratings, as reported by major rating agencies.
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The article S&P lowers Israel's rating due to war dangers comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/sp-abbassa-il-rating-di-israele-per-i-pericoli-della-guerra/ on Fri, 19 Apr 2024 13:28:57 +0000.