Daily Management Review

S&P downgrades Israel's ratings to 'A+' from 'AA-' due to rising geopolitical risks


Israel's long-term foreign and local currency ratings were reduced to "A+" from "AA-" by international rating agency S&P Global Ratings, which noted that the country's already significant geopolitical risks are compounded by escalating confrontation with Iran.

"Negative" ratings are anticipated.

"We expect a broader regional conflict to be avoided, but Israel's war with Hamas and confrontation with Hezbollah are likely to continue throughout 2024," reads a press statement issued by S&P.

The agency's experts had previously predicted that military activity would end after six months.

S&P projects that Israel's budget deficit will expand to 8% of GDP in 2024, mostly as a result of higher defense expenditures.

If hostilities worsen, the agency might lower the nation's rankings once again, raising the geopolitical risks for the nation.

"We could also lower the ratings in the next 12-24 months if the effects of the conflicts on Israel's economic growth, budget and balance of payments are more severe than we currently project," the announcement reads.

source: ft.com