Moody’s keeping Israel’s credit rating unchanged until it is clear that Gaza ceasefire will last

Global credit rating agency Moody’s will not yet change Israel’s credit rating, it says in a report on the impact of the ceasefire in Gaza.

Instead, it will wait to ensure that the ceasefire holds and that fighting does not resume before it raises Israel’s score.

“The deal is credit positive for Israel because it will further enable resources and policymakers’ attention to shift back to supporting the economy and fiscal consolidation efforts,” the agency acknowledges. “However,” it says, “any significant benefit to Israel’s credit profile from the deal would come after a sustained move beyond the initial first phase.”

This decision is due to the estimation that future phases of the Gaza deal will be “increasingly difficult to achieve,” Moody’s says. “Risks remain high that the deal will not be fully implemented, which could result in the ceasefire breaking and the resumption of military conflict in Gaza.”

It says, however, that it expects Israel’s real GDP growth for 2025 will be close to 2.5 percent, up from its previous forecast of 2.0%.

But as it had already assessed that the war wouldn’t last beyond early 2026, Moody’s says the ceasefire has a limited effect on forecasts for 2026 and beyond.