Français
Español
English
Portuguese
The shekel has strengthened, Israel’s risk premium has declined, and the Tel Aviv Stock Exchange has outperformed many leading global markets.
By Shula Rosen
Moody’s has raised Israel’s credit outlook from negative to stable, citing an improved security environment, while keeping the country’s rating at Baa1.
The move follows a similar step by S&P Global Ratings in November.
Moody’s had taken a stricter stance than other agencies during the war, including an unusual double downgrade in September 2024, shortly before the assassination of Hezbollah leader Hassan Nasrallah in Lebanon, according to Globes.
Since then, financial indicators have shifted. The shekel has strengthened, Israel’s risk premium has declined, and the Tel Aviv Stock Exchange has outperformed many leading global markets.
Moody’s said the primary reason for the outlook change was a reduction in immediate security risk. “We expect Israel’s geopolitical and security environment to remain fragile, with occasional flare-ups that could lead to ceasefire violations and even a return to military confrontations,” the agency wrote.
At the same time, it added that conditions have improved enough that the chance of further significant damage to Israel’s credit profile has “substantially decreased.”
The agency made clear that the rating itself remains constrained by ongoing uncertainty. “Looking ahead, geopolitical risks remain heightened and constitute a limitation on the rating,” Moody’s noted.
Moody’s also pointed to economic performance during the conflict period. “The Israeli economy has proven its resilience during a brief but intense conflict with Iran over the past two years,” the report said.
It forecast growth of 5% in the coming year and 3%–3.5% in the following two years, calling this “a robust level relative to other developed economies.”
The agency expects the fiscal deficit to narrow and the debt-to-GDP ratio to hold at 68%. It also highlighted continued investment in Israel’s technology sector.
For a future rating upgrade, Moody’s said a sustained easing of tensions would be key, “As a result of increasing clarity about the sustainability of ceasefires and ongoing political solutions to the multiple causes of tensions.”
Fiscal tightening would also help. Conversely, renewed escalation or institutional weakening, particularly involving the judiciary, could renew downward pressure.
Do You Love Israel? Make a Donation - Show Your Support!
Donate to vital charities that help protect Israeli citizens and inspire millions around the world to support Israel too!
Now more than ever, Israel needs your help to fight and win the war -- including on the battlefield of public opinion.
Antisemitism, anti-Israel bias and boycotts are out of control. Israel's enemies are inciting terror and violence against innocent Israelis and Jews around the world. Help us fight back!
