The ratings agency said in the past Israel’s credit profile has shown resilience to terrorist attacks and military action but a long conflict will be different.
Ratings agency Moody’s has issued an analysis of the impact of the war between Israel and Hamas. The agency is expected to issue a tough report on Israel on Friday, which could see the country’s A1 stable credit rating cut.
Meanwhile due to the surprise attack by Hamas on Israel, Moody’s has published a report analyzing the economic impact of the war on Israel. Moody’s stresses that this security event will be different from previous operations.
The report said, “In the past Israel’s sovereign credit profile has shown resilience to terrorist attacks and military action. However, a prolonged conflict that durably and significantly impairs economic activity and policymaking would test that resilience.
Moody’s mentioned that security events in the past harmed sentiment in the markets and resulted in a rise in oil prices due to sensitivity to events in the Middle East but stresses that there influence was limited.
The report concludes that economic indicators are expected to remain particularly volatile, adding to the geopolitical uncertainty in the region and oil price fluctuations, but emphasizes that the effects still seem limited. However, a scenario where military action escalates across the region would have implications for global growth as well as inflation.
Published by Globes, Israel business news – en.globes.co.il – on October 12, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.
Moody’s credit: Shutterstock/Daniel J. Macy
