S&P joins credit rating agencies Moody’s, Fitch in stressing importance of sustaining ceasefire for judging Israel’s economy
Sharon Wrobel is a tech reporter for The Times of Israel.
Credit rating agency Standard & Poor’s warns that the recent ceasefire agreement between Israel and the Hamas terror group could face “implementation risks.”
S&P joins fellow credit rating agencies Moody’s and Fitch in assessing that a durable ceasefire and end of the war in Gaza would ease the pressure on Israel’s economy and public finances while warning that its implementation is “vulnerable” as it depends on the outcome of additional negotiations.
“The potential for continued conflict in the region persists, including shipping disruption in the Red Sea by Houthis and skirmishes between Israel and Hezbollah in Lebanon,” says S&P. “Previous regional negotiations and ceasefire agreements, including between Israel and Hezbollah, appeared subject to breaches by both parties and have resulted in episodes of resumed military activity.”
Back in October, S&P lowered Israel’s credit rating for a second time in 2024. The rating agency cut Israel’s rating to ‘A’ from ‘A+’. It maintained a negative outlook leaving the door open for further rating downgrades.
“The multi-stage nature of the [ceasefire] agreement, amid the complex and volatile political context, will test the ability and willingness of both Israel and Hamas to comply,” S&P states. “We also understand there are disagreements within Israel’s government and among Hamas’ leaders on acceptable concessions.”
“In the coming weeks, we will assess whether the deal’s implementation can result in a sustainable ceasefire and reduce the risk of protracted or intensified military conflicts, which are currently reflected in the negative outlook on our sovereign ratings on Israel,” S&P adds.