S&P Lowers Israel's Credit Rating Amid Escalating Conflict

The downgrade reflects heightened geopolitical risks and economic challenges as Israel faces increased military tensions with Hezbollah and Iran.

S&P Global Ratings has downgraded Israel's long-term credit rating from A+ to A, citing significant geopolitical and security risks.
The downgrade follows a similar move by Moody's, which reduced Israel's rating by two notches, reflecting concerns over prolonged conflict and economic recovery.
S&P predicts Israel's real GDP growth will stagnate at 0% in 2024, with a modest recovery to 2.2% in 2025, while fiscal deficits are expected to widen.
The ongoing conflicts, including retaliatory attacks from Hezbollah and Iran, have increased defense spending and strained Israel's budget, with war costs estimated at $66 billion.
Despite the downgrades, Israeli officials highlight the nation's economic resilience, strong balance of payments, and significant foreign exchange reserves as key strengths.