Moody’s Investors Service recently downgraded Israel’s credit rating for the first time ever, citing the impact of Israel’s ongoing war on the Gaza Strip. This significant development has left many questioning Israel’s boasting about its economic strength. The conflict has resulted in devastating consequences for thousands of Palestinians as well as for Israel.
The war in Gaza, which has stretched on for more than 127 days, has caused significant damage to Israeli military vehicles and soldiers. Prime Minister Benjamin Netanyahu claims that Israel will win the war, but his rhetoric has been met with skepticism by many. Meanwhile, the Palestinian Resistance continues to cause daily costs of $220 million to the Israeli government and an astronomical amount of $18 billion overall.
The downgrading of Israel’s credit rating is a material increase in political risk for the nation. Moody’s expects Israel’s debt burden to be higher than projected following the conflict, which will likely have long-term consequences for the nation’s economy. This news comes at a time when Netanyahu is facing criticism over his handling of the conflict and other issues. It remains to be seen how this development will impact Israel’s future prospects.