“We could lower the ratings on Israel in the next 24 months if the military conflicts become a bigger-than-anticipated detriment to Israel’s economic growth, fiscal position, and balance of payments.”
Global credit ratings agency Standard & Poor’s (S&P) downgraded Israel’s long-term rating from ‘A+’ to ‘A’ on Tuesday amid an escalating conflict with the Hezbollah movement in Lebanon.
Following a similar move by Moody’s last week, the rating agency cited risks to Israel’s economy and public finances from the ongoing warfare with Hezbollah and a possible conflict with Iran.
“We now consider that military activity in Gaza and an upsurge in fighting across Israel’s northern border — including a ground incursion into Lebanon — could persist into 2025, with risks of retaliation against Israel,” S&P said. “The latter in particular has been highlighted by a missile attack on Israel by Iran at the beginning of October.”
‘Risk of Retaliatory Attacks’
The agency’s decision was originally scheduled for November 8 but was moved up “due to the significant rise in Israel’s geopolitical and security risks,” S&P said.
Israel suffers major blow as S&P follows Moody's in downgrading credit ratinghttps://t.co/YBgqMXddKe
— Middle East Monitor (@MiddleEastMnt) October 2, 2024
“We could lower the ratings on Israel in the next 24 months if the military conflicts become a bigger-than-anticipated detriment to Israel’s economic growth, fiscal position, and balance of payments,” said the agency.
“This could be the case, for example, if the ongoing conflicts continue to spread, raising the risks of retaliatory attacks against Israel, or if the prospect of a wider regional war directly involving Iran increases.”
Moody’s Rating
On Friday, Moody’s credit rating agency slashed Israel’s credit rating by two levels, from ‘A2’ to ‘Baa1,’ with a negative outlook.
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The decision was issued before Iran fired around 180 ballistic missiles at Israel amid heightened tensions between the two countries.
Iran’s Islamic Revolutionary Guard Corps (IRGC) said the attack was in response to the assassinations of Hamas leader Ismail Haniyeh, Hezbollah leader Hassan Nasrallah and IRGC commander Abbas Nilforoshan.
Israeli Prime Minister Benjamin Netanyahu said Iran made a “big mistake” with its missile attack and “will pay for it.”
Ongoing Genocide
Flouting a UN Security Council resolution demanding an immediate ceasefire, Israel has faced international condemnation amid its continued brutal offensive on Gaza.
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Currently on trial before the International Court of Justice for genocide against Palestinians, Israel has been waging a devastating war on Gaza since October 7.
According to Gaza’s Ministry of Health, 41,689 Palestinians have been killed, and 96,625 wounded in Israel’s ongoing genocide in Gaza starting on October 7, 2023.
Moreover, at least 11,000 people are unaccounted for, presumed dead under the rubble of their homes throughout the Strip.
Lebanon Killings
The conflict has spread to Lebanon, with the Israeli army launching massive airstrikes on parts of Lebanon, killing more than 1,073 people and injuring over 2,950 others since Sept. 23, according to the Lebanese Health Ministry.
Israel has occupied parts of Lebanon for decades and has only left the country in 2000, following stiff Lebanese resistance under Hezbollah’s leadership.
Israel attempted to re-occupy Lebanon in 2006 but failed in what Lebanon considers a major victory against Israel.
Israel, however, continues to occupy parts of Lebanon, namely the Sheeba Farms region.
Hezbollah has vowed to recover every inch of Lebanon that has been occupied by Israel contrary to international law.
The international community has warned that Israeli attacks in Lebanon could escalate the Gaza conflict into a wider regional war.
(Anadolu, PC)
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