In a significant financial development, Moody's, a leading US ratings agency, has announced a downgrade of Israel's credit rating from A1 to A2 on Friday, attributing the decision to the detrimental impacts of the ongoing conflict with Hamas in Gaza. This marks the first time Israel has experienced a downgrade by Moody's, as reported by Bloomberg.
The agency justified its decision by highlighting the increased political risk and the weakening of Israel's executive, legislative institutions, and fiscal strength due to the "ongoing military conflict with Hamas, its aftermath, and wider consequences." Furthermore, Moody's adjusted its outlook on Israel's debt to "negative," signaling concerns over potential escalations with Hezbollah, a powerful Lebanese militant group operating along Israel's northern border.
