Only permanent ceasefire will reduce risks to Israeli economy: Moody's
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Moody's Credit Rating Agency confirms that only a permanent ceasefire in Gaza can effectively reduce the negative risks to the Israeli economy.
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People buy fruits and vegetables in a local market in occupied Yafa, occupied Palestine, on August 16, 2024. (AP)
Moody's Credit Rating Agency emphasized that only a sustained and lasting ceasefire in the Gaza Strip can effectively mitigate the negative risks to "Israel's" economy and public finances, according to Israeli media.
A senior analyst at Moody's said, "The ceasefire agreement reduces the risks to the Middle East from escalation involving Iran, and the impact of the conflict on global supply chains by disrupting shipping in the Red Sea."
He noted that the terms of the ceasefire agreement are "currently limited in scope and duration," highlighting the urgent need for further negotiations to achieve a permanent cessation of hostilities and ensure a sustainable reduction of regional geopolitical tensions.
Fang warned that domestic political challenges and security concerns are a few of the obstacles that could limit any economic progress in the Israeli occupation.
Moody's warns 'Israel' ceasefire may not ease long-term risks
In a similar context, Moody's Investors Service cautioned on November 28 last year that it was too early to assess whether "Israel's" ceasefire with Hezbollah would significantly and sustainably reduce the risks that prompted the agency to downgrade "Israel's" sovereign credit rating in September.
Fitch Ratings noted that the ceasefire would possibly limit strains on "Israel's" credit profile, though it emphasized that the broader security and economic challenges remain unresolved. Moody's echoed this sentiment, stating that while the immediate geopolitical risks appeared to have eased, the situation remained fluid.
Months ago, Moody’s downgraded "Israel’s" credit rating by two notches, from A2 to Baa1, in a move described as "dramatic." The agency has maintained a negative outlook, cautioning that "Israel could face further downgrades."
In September 2024, Moody's highlighted that "the deterioration in Israel's institutional quality and financial management, along with the rise in spending needs during the war period, has negatively impacted the country’s creditworthiness."
