S&P downgrades Israel amid escalating Hezbollah conflict

Credit rating agency S&P Global lowered Israel's credit rating by one point from "A+" to "A" on Tuesday, citing economic and financial risks stemming from the escalating conflict with Iran-backed Hezbollah in Lebanon.

Credit rating agency S&P Global lowered Israel's credit rating by one point from "A+" to "A", citing economic and financial risks stemming from the escalating conflict with Iran-backed Hezbollah in Lebanon.

The outlook for Israel's rating according to S&P remains "negative".

In its justification, the agency highlighted potential security threats, including retaliatory rocket attacks on Israel that could negatively impact the economy.

S&P assessed that the armed conflict in the Gaza Strip and the Israeli military's ground operation in Lebanon could continue until 2025, posing the threat of retaliatory attacks on Israel.

Last week, Moody's, another major rating agency, downgraded Israel's credit rating by two points to "Baa1."

Iran attacked Israel with nearly a hundred rockets on Tuesday. A nationwide alarm was declared in Israel. The army reported that it shot down "a large portion" of the missiles.

According to Tehran, the airstrike was revenge for Israel's killing of Hamas and Hezbollah leaders and not in response to the attack on Lebanon.

Iran’s Supreme Leader Ayatollah Ali Khamenei threatened on Tuesday on X that Israel faces a "stronger and more painful" attack from Iran.

"Victory comes from Allah and it is close," Khamenei wrote.

Israel has already announced a response.