The credit rating agency reported that the Israeli economy is expected to weaken further in the long term due to military conflict. International credit rating agency Moody’s lowered Israel’s credit rating from “A2” to “Baa1” while keeping the country’s credit outlook negative. The statement from Moody’s indicated that Israel’s credit rating had been revised. It was noted that Israel’s credit rating in foreign and local currency was downgraded from “A2” to “Baa1,” with the credit outlook remaining negative. The agency’s statement highlighted that the main reason for the rating downgrade was the significant increase in geopolitical risk reaching very high levels, which would have important negative consequences for Israel’s credibility in both the short and long term. The statement also mentioned that the possibility of a ceasefire in Gaza had decreased, and that internal political risks were increasing alongside geopolitical risks. It was reported in the statement that Israel’s economy was expected to weaken more persistently than previously anticipated due to ongoing military conflict in the long term. The statement emphasized that with increased security risks, a rapid and strong economic recovery, as seen in previous conflicts, was no longer expected, and a delayed and slower economic recovery would have a more lasting impact on the country’s public finances. The statement stressed that the ongoing negative outlook reflected Moody’s view that downward risks persisted. Moody’s had put Israel’s credit rating of “A1” under review for a possible downgrade in October 2023. In February, Moody’s also revised the country’s credit rating from “A1” to “A2” and revised the rating outlook to “negative.”