Moody's cuts 'Israel's' rating, warns of drop to 'junk'
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A dip below the Baa1 level would result in "Israel" losing its investment-grade classification.
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A sign for credit agency Moody's shown on August 13, 2010, in New York (AP)
Moody's cut "Israel's" credit rating two notches to "Baa1" from "A2" on Friday and maintained a negative outlook as its aggression in Lebanon and Palestine continues.
"The key driver for the downgrade is our view that geopolitical risk has intensified significantly further, to very high levels, with material negative consequences for Israel's creditworthiness in both the near and longer term," the rating agency stated.
The downgrade kept Israel's rating three notches into investment grade. However, Moody's noted concerns about "Israel's" security and long-term economic development prospects that they "are much higher than is typical at the Baa rating level."
A dip below that level would result in "Israel" losing its investment-grade classification.
According to Moody's, "The ratings would likely be downgraded further, potentially by multiple notches, if the current heightened tensions with Hezbollah turned into a full-scale conflict."
A loss of investment grade rating often increases the cost of debt payment, and it may drive some investors to liquidate their holdings, further lowering the market price of Israeli bonds.
Fitch lowered "Israel's" credit rating to "A" from "A-plus" last month, maintaining a negative rating outlook.
On Saturday, the Islamic Resistance in Lebanon - Hezbollah targeted the Israeli Ramat David Airbase and airport on Saturday with a volley of Fadi-3 rockets.
Hezbollah also announced that the Israeli settlement of Kabri [in Western Al-Jalil] was targeted with a Fadi-1 rocket salvo.
The Resistance affirmed that these attacks are in support of the steadfast Palestinian people in Gaza and their Resistance, in defense of Lebanon and its people, and in response to "Israel's" brutal aggression on cities, villages, and civilians.
Al Mayadeen's correspondent in South Lebanon confirmed that rocket salvos were launched toward northern occupied Palestine, with sirens sounding in multiple northern settlements.
Israeli economy in ‘serious danger’: Washington Post
In a new report, The Washington Post highlighted the significant challenges facing "Israel's" economy amid Tel Aviv's aggression on Lebanon and Gaza.
"Israel" has experienced a downgrade in its credit rating and a sharp contraction in its gross domestic product. Tens of thousands of businesses have shut down, and an increasing number of jobs are being outsourced. Many Israeli reservists have had to pause their careers or struggle to balance them with military service commitments.
The construction and agriculture industries have also faced significant challenges. According to the Central Bureau of Statistics, tourism has plummeted by over 75%, closing many shop fronts.
On the other hand, military spending has at least doubled, with the Central Bank warning that the ongoing war could cost $67 billion through 2025. This prediction was made prior to "Israel’s" recent escalation in Lebanon and the mobilization of two reserve brigades to the northern front on Wednesday.
“The economy is in serious danger unless the government wakes up,” Israeli economist Dan Ben-David, who heads the Shoresh Institution for Socioeconomic Research, told The Washington Post.
“Right now they are completely disconnected from anything that is not war … and there is no end in sight,” he stressed.
