Following Moody’s, S&P also announced it would lower Israel’s credit rating again, warning that fighting against Hamas in Gaza and Hezbollah in Lebanon “could continue until 2025, with the risk of continued retaliation.”
In a statement, S&P says it has lowered Israel’s long-term credit rating from ‘A+’ to ‘A’ with a negative outlook, which it says “reflects risks to its growth, public finances and Israel’s balance of payments due to the escalation of the conflict with Hezbollah in Lebanon, including immediate security threats in the event of rocket retaliation against Israel.”
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“The negative outlook also reflects the risk of an immediate war with Iran, although this is not included in our current base script,” adds the ratings agency, noting tonight’s missile strike.
S&P is also reducing its growth forecast for this year and next, forecasting zero growth in 2024 and 2.2% in 2025 “along with widening budget deficits in the short and medium term as spending defense-related issues increase even further.”