ISRAEL AT WAR
S&P Global revises Israel's outlook to 'negative'
The change from ‘stable’ was due to the possibility that the Israel-Hamas war could spread more widely.
S&P Global has revised Israel's outlook from “stable” to “negative”, stating that risks posed by the Israel-Hamas war could spread more widely with a more prominent impact on the economy and security situation in the country. The news follows peer Fitch placing Israel’s sovereign debt rating of "A+" on rating watch negative, warning that a major escalation of the ongoing conflict with Hamas could result in a negative rating action.
"We currently assume the conflict will remain centered in Gaza and last no more than three to six months," S&P said in a statement.
It was made clear that S&P could revise the outlook to "stable" if the conflict is resolved, resulting in a "reduction in regional and domestic security risks without a material longer-term toll on Israel's economy and public finances."
It added that international support could mitigate some of the negative macroeconomic effects on Israel. The agency affirmed the country's "AA-/A-1+" long-term and short-term foreign and local currency sovereign credit ratings.
This week it was reported that the ongoing war with Hamas could cost over NIS 70 billion ($17.2 billion), about 3.5% of GDP, according to the chief economist of Meitav Investments House, Alex Zabezhinsky.
