London, September 27, 2024 -- Moody's Ratings (Moody's) has today downgraded Government of Israel's long-term local and foreign-currency issuer ratings to Baa1 from A2. Concurrently, the local-currency and foreign-currency senior unsecured ratings were also downgraded to Baa1 from A2 and the foreign-currency senior unsecured shelf rating and the foreign-currency senior unsecured MTN rating were downgraded to (P)Baa1 from (P)A2. The outlook remains negative.
Moody’s gives the reason for the downgrade:
The key driver for the downgrade is our view that geopolitical risk has intensified significantly further, to very high levels, with material negative consequences for Israel's creditworthiness in both the near and longer term. The intensity of the conflict between Israel and Hezbollah has increased significantly in recent days. This is in the context of Israel's publicly-stated objective to return its evacuated residents back to the North of the country. Achieving this objective is likely to involve a yet more intense conflict. At the same time, prospects for a ceasefire in Gaza have receded and we assess that domestic political risks have increased alongside geopolitical risks.
Longer term, we consider that Israel's economy will be more durably weakened by the military conflict than expected earlier. With heightened security risks (a social consideration), we no longer expect a swift and strong economic recovery as in previous conflicts.
Moody goes on to state that:
More generally speaking, there is no visibility on an exit strategy from the military conflict that would restore a level of certainty and security, on which the economy and business investment ultimately rely.
These two downgrades since the start of the Gaza war are Moody's first-ever credit rating downgrades of Israel since the country began receiving sovereign credit assessments in 1998. This will make borrowing money to prosecute the war more expensive. The cost of the war was expected to reach around 11% of Israel’s GDP by 2025, before the latest credit downgrade.
The Bank of Israel had downgraded growth forecasts to 2% for 2023 and 2024, a big drop from earlier projections of 3% before the war. Unemployment has spiked sharply, from 3.6% pre-war to over 9% by late 2023??.
These ratings and projections do not factor in the all-out regional war Netanyahu is determined to provoke.
You know things are getting desperate when Netanyahu is trying to recruit African immigrants to fight in Gaza. The same African immigrants that Bibi called ‘African infiltrators’ who he was trying to deport en mass.
Israeli security officials are offering the incentive of permanent residency status to asylum seekers who agree to participate in sometimes life-threatening military operations in Gaza. Sources say that internal criticism of this exploitation has been silenced: 'This is a very problematic matter' — Haaretz
Reserve General Yitzhak Brik, the former commander of Israeli military colleges and ombudsman of the Israeli army, wrote:
“If the war of attrition against Hamas and Hezbollah continues, Israel will collapse within no more than a year.”
Netanyahu has added eliminating Hezbollah to his fantasy of wiping out Hamas. Netanyahu is determined to turn Lebanon into another Gaza, yet after a year of war in Gaza, leveling the entire place to rubble, butchering thousands of women and children, killing multiple Hamas leaders, including the head of Hamas, along with his children and grandchildren. Hamas is still blowing up Israeli tanks and armored personnel carriers and fighting the IDF in every part of Gaza.
For every Hamas fighter killed there are a dozen replacements ready to avenge murdered parents, grand parents, siblings and children. Israel has been assassinating the leadership of Palestinian groups for decades. After each killing of a senior leader, Israel does a victory lap, declaring the resistance mortally wounded and degraded. However, the reality is that it has had zero effect on Palestinian resistance. The leaders are replaced, the resistance grows, new groups arise, and new leaders replace those killed because the reason for resistance is still there.
The same applies to Hezbollah in Lebanon:
Abbas al-Musawi, Hezbollah’s co-founder and second secretary-general, was assassinated in 1992 in southern Lebanon by Israeli helicopter gunships, which also killed his wife and five-year-old son. On this occasion, too, Israel was quick to congratulate itself on its bloody feat – yet the celebration was woefully premature. Following al-Musawi’s assassination, Nasrallah was elected secretary-general and went on to turn Hezbollah into a formidable force not just in Lebanon, but throughout the region.
Under his leadership, Hezbollah expelled Israel from Lebanese territory in 2000, thereby putting an end to a brutal 22-year occupation, and successfully fought back during the 34-day war on Lebanon in 2006, dealing the Israeli military humiliating blows. — Aljazeera
Despite Netanyahu’s delusional projections of total victory, the financial markets are beginning to factor in Netanyahu’s suicidal leadership and its negative impact on Israel’s future. There is only one path to peace and security. The end of the occupation and justice for Palestinians. The road that Netanyahu has taken leads to disaster for Israel and the United States. https://www.dailykos.com/story/2024/9/30/2273726/-Moody-s-lowers-Israel-s-credit-rating-again
Market Data 
Markets 
AI
