JERUSALEM (FFN) – International credit rating agency Moody’s has issued a stark warning to Israel about the potential economic fallout of a direct military conflict with Hezbollah or Iran. According to a report by Reuters, Moody’s highlighted that such a conflict could severely impact Israeli debt issuers.
Moody’s noted, “We continue to assume that ongoing tensions will not escalate into a full-scale military conflict between the parties or extend to Iran, which helps to mitigate the immediate negative impact on the region’s creditworthiness.” However, the agency cautioned that a “full military conflict with Hezbollah or Iran could have significant credit implications for Israeli debt issuers.”
In February, Moody’s downgraded Israel’s credit rating to A2 with a negative outlook, pointing to substantial political and fiscal risks stemming from its conflict with the Palestinian militant group Hamas. The other two major global rating agencies, S&P and Fitch, also downgraded Israel’s credit rating earlier this year, in April and August respectively.
Recently, tensions escalated as the Iranian-backed Hezbollah launched hundreds of rockets and drones at Israel on August 25, prompting the Israeli military to respond with about 100 fighter jets in one of the fiercest confrontations in over ten months of border warfare.
Keywords: Moody’s, Israel, Hezbollah, Iran, credit rating, military conflict, Israeli debt issuers, A2 rating, financial risks.
