Moody's downgrades 'Israel's' credit rating due to war on Gaza
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Moody's, the US ratings agency, downgraded "Israel's" credit rating on Friday due to the repercussions of its ongoing war on Gaza.
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A sign for Moody's rating agency is displayed at the company headquarters in New York, Sept. 18, 2012. (AFP)
Moody's, the US ratings agency, decreased "Israel's" credit rating on Friday due to the repercussions of its ongoing war on Gaza, downgrading it by one level from A1 to A2.
It stated that it made the downgrade after evaluating that "the ongoing military conflict with Hamas, its aftermath, and broader ramifications significantly increase the political risk for Israel, while also undermining its executive and legislative institutions as well as its fiscal strength, in the foreseeable future."
The rating agency also revised its outlook for "Israel's" debt to "negative" citing "the risk of escalation" with Hezbollah. It stated that the "risks of escalation of the conflict with Hezbollah still exist, increasing the possibility of a major negative impact on the Israeli economy".
Read next: Weight of war weighing heavily on Israeli economy
S&P Global Ratings downgraded "Israel's" credit outlook from stable to negative following Operation Al-Aqsa Flood due to concerns that the confrontations between the IOF and Palestinian Resistance could escalate further.
Fitch, the final of the three major US ratings agencies, placed "Israel" on negative watch due to risks stemming from the war.
The rating agency said in the statement on Friday explaining its decision that "the weakened security environment implies higher social risk and indicates weaker executive and legislative institutions than Moody's previously assessed."
"At the same time, Israel's public finances are deteriorating and the previously projected downward trend in the public debt ratio has now reversed," it continued.
"Moody's expects that Israel's debt burden will be materially higher than projected before the conflict," it added.
