JERUSALEM, May 11 (Xinhua) -- Moody's Ratings on Friday night upheld Israeli government's credit ratings at A2 with a "negative" outlook, the Israeli Finance Ministry said.
According to the agency, the current A2 rating reflects Israel's heightened exposure to geopolitical risks, with a baseline scenario foreseeing ongoing conflict with Hamas, as well as tensions with Iran and Hezbollah.
At the same time, Moody's pointed out a rapid economic recovery in the first quarter of 2024 following a sharp decline in Israel's activity during the same period last year. Specifically, the hi-tech sector experienced a robust recovery, with no signs of decreased interest from foreign investors, it said.
Moody's expects Israel's real GDP growth to be just 0.6 percent for 2024, with potential recovery in 2025 assuming an end to hostilities in the current year.
The forecast for Israel's budget deficit in 2024 is around 7.8 percent of GDP due to weaker-than-expected growth and high expenses, including those for housing evacuees from the northern region continuously attacked by Hezbollah.
The agency also highlighted Israel's significant exposure to social risks, reflecting the conflict's negative impact on the country's health and safety condition.
In early February, Moody's downgraded the Israeli government's credit ratings for the first time to A2 from A1, with a "negative" outlook, lowered from "stable." ■
