Moody’s Reaffirms Confidence in Israel’s Economy Amid Global Turbulence
In a strong vote of confidence, Moody’s Investors Service has affirmed Israel’s long-term local and foreign-currency ratings at “Baa1”, underscoring the nation’s economic resilience and global creditworthiness—even amid complex geopolitical challenges. While maintaining a “negative” outlook due to elevated fiscal pressures stemming from the ongoing regional conflict, the agency recognized Israel’s enduring financial stability and robust market access.
Moody’s noted that Israel’s debt-to-GDP ratio is now expected to peak at around 75% in the medium term, up from a previous estimate of 70%, as a result of heightened defense spending and moderated economic growth. Yet even with these added burdens, Israel has successfully navigated turbulent waters—demonstrating its ability to attract funding and execute bond sales during times of war, a testament to global investor trust.
The agency praised the country’s economic resilience and signs of a promising rebound, particularly in the dynamic high-tech sector. Q1 2025 alone saw $2.2 billion in tech investments, fueling renewed momentum in investment and consumption.
Looking ahead, Moody’s forecasts a return to growth, with real GDP expected to expand by 2% in 2025, followed by a robust 4.5% surge in 2026—powered by post-conflict reconstruction, innovation, and increased domestic spending.
Moody’s analysis aligns with recent affirmations from other leading rating agencies. S&P Global maintained Israel’s “A/A-1” rating in May, emphasizing the strength of Israel’s fiscal fundamentals despite geopolitical pressures. Fitch Ratings also retained Israel’s “A” rating, acknowledging that while the Iran conflict has had consequences, they remain manageable within the current rating framework.
Together, these international assessments signal enduring faith in Israel’s long-term economic potential, highlighting a country that, even in adversity, stands as a model of fiscal adaptability, strategic innovation, and unshaken resilience.
