Moody's: The reason for lowering Israel's credit rating is the war with Hamas (Reuters)
Moody's lowered Israel's credit rating to "A2" with a negative outlook, while Israeli Prime Minister Benjamin Netanyahu commented on this by saying, "Israel's economy is strong, and the lowering of the credit rating is because we are in a state of war."
Moody's said that the reason for lowering Israel's credit rating was the war with the Islamic Resistance Movement (Hamas) and its repercussions. The agency also expected the debt burden in Israel to rise above pre-war expectations.
Moody's added that the risks of escalation of the conflict with Hezbollah still exist, increasing the possibility of a significant negative impact on the Israeli economy.
Meanwhile, Netanyahu was quick to downplay the importance of the downgrade, noting that Israel's economy is solid, and that the downgrade in the credit rating was due to the war, adding that "the economy will return to recovery again after victory."
The credit rating usually reflects the ability of countries to obtain loans and the extent of confidence in their ability to meet financial obligations on time.
The better the rating, the lower the risks associated with borrowing, thus obtaining better terms and lower costs of borrowing.
Source: Al Jazeera + agencies