Moody's Downgrades Israel's Credit Rating to Baa1

Moody's has downgraded Israel's credit rating from A2 to Baa1, attributing the decision to heightened geopolitical risks due to the ongoing conflict with Hezbollah and the lack of an exit strategy. This marks the second downgrade this year, raising concerns about Israel's economic stability and increased costs of servicing debt. The conflict, which began on October 7 with a Hamas-led attack, has resulted in significant financial strain, amounting to over NIS 250 billion ($67.6 billion). Moody's has also maintained a negative outlook, warning of further potential downgrades should the conflict escalate. The downgrade keeps Israel's rating within investment grade but highlights significant risks to the country's long-term economic growth and fiscal health.