S&P could downgrade Israel again this week

IDF troops in Jabalia in the Gaza Strip  credit: IDF Spokesperson
IDF troops in Jabalia in the Gaza Strip credit: IDF Spokesperson

On Friday ratings agency S&P will issue Israel's latest rating, just one month after its unexpected decision to cut Israel's credit rating for the second time this year with a negative outlook.

On Friday ratings agency S&P will issue Israel's latest rating, just one month after its unexpected decision to cut Israel's credit rating for the second time this year with a negative outlook. In April, S&P had cut Israel's rating from AA- to A+.

In its decision at the start of October, the ratings agency stressed that there could be a further downgrade if, "The military conflict will cause bigger harm than expected to growth and if the conflict continues to spread in a way that increases the risks of retaliatory attacks on Israel." Now approaching November 8, the original planned date for a rating announcement about Israel, concerns are growing in Israel that the negative outlook will be realized.

Israeli forecasts have also fallen into line

Since S&P's decision in October, local forecasts have also aligned with the negative outlook regarding growth. The Bank of Israel cut its growth forecast for 2024 to only 0.5% and 3.8% in 2025. Last week, the Ministry of Finance cut its growth forecast to 0.4% for 2024 (down from 1.5% in the June forecast), but the Ministry remains optimistic about 2025, seeing 4.3% growth.

A harsh report was published last week by S&P Global Market Intelligence's research department predicting that Israel's economy would shrink due to the war. The report saw GDP contracting in Israel this year, with negative growth of 0.2%. Growth will also be reduced in the coming years with S&P predicting 3.2% growth in 2025 and 3.6% growth in 2026. The fiscal deficit is seen reaching 9% this year and remaining high at 6% next year and 5% in 2026. The report stresses that there could be changes due to developments in the war.

Later this month Fitch will publish its decision on Israel's credit rating. Fitch's rating for Israel is on the same level as S&P. At the end of September Moody's unexpectedly downgraded Israel's credit rating from A2 to Baa1 with a negative outlook. Moody's was the first rating agency to cut Israel's rating in February 2024.

Published by Globes, Israel business news - en.globes.co.il - on November 5, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

IDF troops in Jabalia in the Gaza Strip  credit: IDF Spokesperson
IDF troops in Jabalia in the Gaza Strip credit: IDF Spokesperson
groundcover founders credit: Yossi Yarom Israeli observability co groundcover raises $35m

groundcover has developed a “Bring Your Own Cloud” (BYOC) observability solution, redefining the architecture of a modern observability platform.

Tel Aviv Stock Exchange credit: Shutterstock MagioreStock Foreign investment on TASE hits five-year high

Foreign investors have been flocking to the Tel Aviv Stock Exchange in recent weeks, the TASE research department tells "Globes."

Elbit Systems tank turret systems credit: Elbit Systems Elbit Systems wins $100m tank turret systems deal

The Israel defense electronics company will supply its advanced UT30 MK2 unmanned turret systems to General Dynamics European Land Systems (GDELS) to be supplied to a NATO European country.

Tomer Weingarten Photo: PR Trump targets SentinelOne exec in act of revenge

The US administration has suspended the security clearance of the company's chef intelligence and public policy officer Chris Krebs and everyone associated with him.

Tel Aviv Stock Exchange share prices rising credit: Tali Bogdanovsky TASE opens sharply higher after Trump U-turn on tariffs

The pause is being interpreted as a climb down after US President Donald Trump admitted he had made the move to calm the markets.

Ashot Ashkelon credit: Ministry of Defense Up 250%, Ashot Ashkelon wins another Defense Ministry order

The Israeli defense company's share price has risen 250% in the past three years since FIMI Opportunity Funds acquired control.

Liad Agmon credit: Eyal Izhar Insight Partners Liad Agmon steps down as managing partner

Serial entrepreneur Agmon has served as a partner at Insight Partners Israel alongside Daniel Aronovitz who set up the Israel office.

Shekels credit: Shutterstock Vladerina32 Shekel slide resumes amid escalating tariff war

The Bank of Israel is not expected to intervene in the forex market despite the sharp depreciation of the shekel.

Nir Zuk credit: Inbal Marmari Palo Alto Networks mulls buying AI security co for $700m

Sources inform "Globes" that on Palo Alto's radar is Protect AI.

President Donald Trump hosts Prime Minister Benjamin Netanyahu credit: Reuters Kevin Mohatt Israeli officials confident on US tariff concessions

Senior Israeli figures believe that concessions could be tied to progress on strategic regional political issues that are important to President Trump.

Phoenix Investment House CEO Avner Hadad  credit: Tommy Harpaz "The market has priced in all the bad things"

Phoenix Investment House CEO Avner Hadad says US markets could continue to fall, but that we are close to interesting territory for patient investors.

Tel Aviv credit: Shutterstock Tel Aviv slips in World's Wealthiest Cities ranking

Tel Aviv's position as one of the world's wealthiest cities took a big knock over the past year as it slipped from 42nd to 48th in investment advisors Henley & Co.'s "World's Wealthiest Cities" Top 50 ranking.

Leviathan platform  credit: Albatross C'ttee seen recommending no cut in gas exports

The Dayan committee on the future of the gas sector estimates that Israel's natural gas reserves will run out in 2045.

Accountant General Yali Rothenberg credit: Rafi Kutz Israel's fiscal deficit continues to narrow

The deficit narrowed in the twelve months to the end of March 2025, for the sixth consecutive month, Ministry of Finance accountant general Yali Rothenberg reported today.

Arkia credit: Arkia Arkia cuts Tel Aviv - New York April fares

Arkia has cut fares at the last minute, a time when prices usually soar even higher, according to the pricing method used in the industry.

Bank of Israel Governor Prof. Amir Yaron credit: Dani Shem Tov Knesset Spokesperson BoI Governor: US tariffs could push up inflation in Israel

Prof. Amir Yaron tells "Globes" that there is a risk that the new tariffs will cause inflation to rise in the US, with a knock-on effect for Israel.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018