Moody’s Holds Israel Rating, Calls Gaza Truce Credit Positive With Caveats By The Media Line Staff Moody’s Ratings said on Sunday it is leaving Israel’s sovereign rating unchanged, judging that the Gaza ceasefire agreement is credit positive but still fragile, according to a report released in New York. The agency explained that the truce could let policymakers […]
Business
The Media Line: Moody’s Holds Israel Rating, Calls Gaza Truce Credit Positive With Caveats
Audio By Carbonatix
Moody’s Holds Israel Rating, Calls Gaza Truce Credit Positive With Caveats
By The Media Line Staff
Moody’s Ratings said on Sunday it is leaving Israel’s sovereign rating unchanged, judging that the Gaza ceasefire agreement is credit positive but still fragile, according to a report released in New York. The agency explained that the truce could let policymakers refocus on growth and fiscal repair, yet risks tied to implementation and security remain high.
Moody’s wrote that the deal may create space for economic recovery and fiscal consolidation in the near term. “However, any meaningful benefit to Israel’s credit profile would come only after sustained progress beyond the initial phase,” analysts said, cautioning that later steps in the agreement are harder to execute. The report added: “Risks remain high that the deal will not be fully implemented, which could result in the ceasefire breaking and renewed military conflict in Gaza.”
The agency linked longer-run credit gains to improved regional security, governance, and reconstruction in Gaza, a resumption of shipping through the Suez Canal, and lower tensions between Israel and Iran. Moody’s now expects Israel’s real GDP to grow about 2.5% in 2025—up from a prior 2% forecast—and 4.5% in 2026, assuming the security backdrop stabilizes.
Moody’s downgraded Israel’s rating in September 2024 from A2 to Baa1, citing heightened geopolitical risk and a weaker outlook following the Israel–Hamas war that began on October 7, 2023. Since then, Israel has faced elevated defense spending, disrupted trade flows, and softer private investment, while the banking system has remained liquid and the central bank has supported market function. Whether the ceasefire translates into lasting economic momentum, Moody’s suggested, will hinge on sustained de-escalation and credible plans for post-conflict governance.