Moody’s puts Israel’s credit ratings on review for downgrade

The US ratings agency Moody’s has put the Israeli government’s A1 credit ratings on review for downgrade, citing the “unexpected and violent conflict between Israel and Hamas.”

The severity of the conflict, sparked by the deadly attack by Hamas on southern Israel on October 7, “raises the possibility of longer lasting and material credit impact,” Moody’s said in a statement Thursday.

More than 1,400 people were killed in the attack, mostly civilians who were shot, mutilated or burnt to death on the first day of the raid, according to Israeli officials.

Israeli responded to the attacks by unleashing a barrage of airstrikes on the Gaza Strip, which have killed at least 3,785 Palestinians, most of them civilians, according to the Hamas-run health ministry.

Moody’s announced that it was putting a number of the Israeli government’s credit ratings on review for a downgrade, including its long-term foreign-currency and local-currency ratings, because of the war.

“Israel’s credit profile has proven resilient to terrorist attacks and military conflict in the past,” it said.

“However, the severity of the current military conflict raises the possibility of longer lasting and material credit impact,” it added.

Moody’s statement comes after Fitch Ratings announced on Tuesday that it was placing Israel’s A+ foreign- and local-currency issuer default ratings on “Ratings Watch Negative.”

In its announcement, Fitch cited “the heightened risk of a widening of Israel’s current conflict to include large scale military confrontations with multiple actors, over a sustained period of time.”