S&P downgrades Israel’s long-term ratings to ‘A’ amid Hezbollah conflict

S&P Global downgraded Israel’s long-term ratings to ‘A’ from ‘A+’ on Tuesday, citing risks to the country’s economy and public finances from the escalating conflict with Iran-backed armed movement Hezbollah in Lebanon.

The rating agency highlighted concerns over potential security threats, including retaliatory rocket attacks against Israel, which could worsen the economic impact.

Peer Moody’s cut the country’s credit rating two notches to “Baa1” last week and warned of a drop to ‘junk’ if the current heightened tensions with Hezbollah turned into a full-scale conflict.

“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.

S&P maintained Israel’s outlook at “negative”. REUTERS