AFP and Bloomberg News reported that international credit rating agency Moody’s downgraded Israel’s national credit rating on the 27th (local time), citing the escalating geopolitical crisis caused by the expansion of the conflict with Hezbollah.

As a result, Israel’s credit rating was downgraded by two levels from A2 to Baa1. Baa1 is the 8th highest level out of Moody’s 21 national credit rating classifications. It is three levels higher than Ba1, which begins to be classified as ‘investmentism’.

Moody’s said on this day that “geopolitical risks surrounding Israel have intensified to a very high level,” and that these risks have “substantial negative consequences for Israel’s credit rating in both the short and long term,” explaining the background to Israel’s credit rating adjustment. .

“In the longer term, we believe that this armed conflict will continue to weaken the Israeli economy more than previously projected,” he added.

As Israel intensifies its offensive against the Lebanese armed political group Hezbollah every day, there are concerns that it may expand its front line to Lebanon following the Gaza Strip.

On this day, Israel protested against Moody’s credit rating downgrade, calling it an “excessive and unfair measure.”

“The extent of the rating adjustment is not in line with the fiscal and macroeconomic data of the Israeli economy,” said Yali Rottenberg, Israel’s finance ministry’s accounting officer. “It is clear that the war on multiple fronts is taking its toll on the Israeli economy, but the rating agency’s “There is no valid reason for the decision,” he claimed.

It has been about seven months since Moody’s downgraded Israel’s sovereign credit rating from A1 to A2 in February. This is the second relegation this year alone.

At the time, Moody’s predicted that Israel’s financial capacity would weaken and its debt burden would increase due to the impact of the war with the Palestinian armed faction Hamas.

(Photo = Yonhap News)

Reporter Park Geun-ah twilight1093@wowtv.co.kr