TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
S&P cut its Israel debt rating to A+ on geopolitical risks
The agency cut its rating from AA- to A+, and said the outlook was negative.
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Israeli military spokesman Rear Admiral Daniel Hagari (right) and his deputy Masha Michelson pose next to an Iranian ballistic missile which fell in Israel on the weekend, during a media tour at the Julis military base near the southern Israeli city of Kiryat Malachi on April 16, 2024. (AFP/Gil Cohen-Magen)
T
he S&P global rating agency downgraded its rating on Israel's long-term debt amid regional tensions, it said in a statement issued late Thursday, just before reports of an Israeli revenge attack on arch-foe Iran.
The agency cut its rating from AA- to A+, and said the outlook was negative.
"The recent increase in confrontation with Iran heightens already elevated geopolitical risks for Israel," S&P said in its statement.
The rating downgrade may add pressure on Israel’s bonds and the shekel, which has fallen this year against the dollar.
"We expect a wider regional conflict will be avoided, but the Israel-Hamas war and the confrontation with Hezbollah appear set to continue throughout 2024 -- versus our previous assumption of military activity not lasting more than six months," it said.
S&P also said that it expects Israel's deficit to widen to 8 percent of GDP in 2024, "mostly as a result of increased defense spending.
"Higher deficits will also persist over the medium term, and we expect net general government debt to peak at 66 percent of GDP in 2026."
S&P said it could "lower the ratings on Israel if the ongoing conflicts widen, further increasing the security and geopolitical risks that Israel faces."
