Moody’s Changes Israel's Outlook from Negative to Stable

SadaNews Economy - Late on Friday, the credit rating agency Moody’s revised its outlook for Israel from "Negative" to "Stable," citing a noticeable decrease in its exposure to geopolitical risks from extremely high levels.

Israel, which has been engaged in a war in Gaza for over two years, reached a ceasefire agreement with Hamas in October. The ceasefire has significantly reduced the intensity of the fighting but has not completely halted it, with both parties exchanging accusations of violating the terms of the agreement.

In its report, Moody’s stated, "We expect that the geopolitical and security environment for Israel will remain fragile, with the possibility of tensions escalating from time to time, which could lead to a breakdown of the ceasefire and the return of military conflicts," while maintaining Israel's local and foreign currency rating at "Baa1."

Earlier this month, Israel announced that it recorded a budget deficit of 4.7 percent of GDP in 2025, down from 6.8 percent in 2024, supported by increased revenues that offset its defense spending amid the war in Gaza.

The change in outlook follows a similar adjustment by Standard & Poor's in November after the ceasefire agreement.