NEW YORK, Oct 20 (NNN-XINHUA) – Ratings agency, Moody’s, yesterday put the Israeli regime’s A1 credit ratings on review for downgrade, citing the “unexpected and violent conflict between Israel and Hamas.”
The military conflict is increasing Israel’s already relatively high exposure to geopolitical risks, Moody’s said in a statement.
“The severity of the conflict raises the possibility of longer lasting and material credit impact,” the agency said. “While a short-lived conflict could still have credit impact, the longer lasting and more severe the military conflict, the greater its impact is likely to be on policy effectiveness, public finances and the economy.”
Israel spends around 4.5 percent of its gross domestic product on defence, considerably more than other countries in the Organisation for Economic Co-operation and Development, Moody’s noted, adding that, the regime is to increase defence spending, as part of the current conflict.
Moody’s warned that it would downgrade Israel’s ratings, if “the current military conflict was likely to materially weaken Israel’s institutions, in particular the effectiveness of its policymaking, its fiscal and/or its economic strength.”
Earlier this week, another global ratings agency, Fitch, placed the regime on rating watch negative, and warned, a major escalation of the ongoing conflict could result in a negative rating action.– NNN-XINHUA
