Moody’s: the likelihood of a further downgrade of Israel’s rating has decreased

International rating agency Moody’s published a review of the state of the Israeli economy, noting that the ceasefire in Gaza has reduced the likelihood of an additional downgrade of Israel’s sovereign credit rating.

Let us recall that in September 2024, Moody’s lowered the Israeli rating by two steps to Baa1 with a negative outlook, lower than other rating agencies.

“The ceasefire agreement reduces the short-term risks to Israel’s economy and government spending, which could be harmed by a protracted conflict. The agreement also reduces the long-term risks to the Middle East from an escalation involving Iran and the impact of the conflict’s spillover on global supply chains,” it said. in the report.

However, the agency notes that the terms of the ceasefire agreement are limited in scope and current duration, and additional negotiations will be required to achieve a permanent ceasefire and a permanent reduction in geopolitical tensions in the region. The report’s analysts did not forget to note the ongoing internal political tension in the country, which could negatively affect the economy.