Moody’s downgrades Israel’s credit rating, citing war in Gaza

Moody’s downgrades Israel’s credit rating, citing war in Gaza

Moody’s downgraded Israel’s credit rating Friday and changed its outlook for the country to negative, citing the war with Hamas and reflecting the ratings agency’s concern that the conflict could become a long-term economic burden.

Moody’s downgraded Israel’s rating from A1 to A2, which is still considered “low credit risk.” The main driver for the downgrade was its assessment that the military operations “materially raise political risk for Israel as well as weaken its executive and legislative institutions and its fiscal strength, for the foreseeable future,” the U.S-based agency said in a statement Friday.

Credit ratings assess the ability of countries or companies to pay back money they have borrowed, and are monitored by investors. Moody’s said it “expects that Israel’s debt burden will be materially higher than projected before the conflict.” Economists estimated that the war had cost Israel some $18 billion by the end of December, or about $220 million a day, The Washington Post reported. Costs are expected to skyrocket if a wider war breaks out with the Lebanon-based militant group Hezbollah.

Israeli Prime Minister Benjamin Netanyahu responded in a statement Friday, arguing that the “economy is strong” and the downgrade is “entirely due to the fact that we are in a war,” Israel’s public broadcaster Kan reported.

Israel plans to remove civilians from refugee-filled Rafah, attack Hamas

Here’s what else to know

Humanitarian organizations condemned Israel’s plans to remove civilians from combat zones in Rafah after Netanyahu called for a “massive operation” in the city, where most of Gaza’s population has sought refuge. Amnesty International said that if the removal order is enacted, it “may amount to the crime of forcible transfer,” which the International Criminal Court considers a crime against humanity. Mercy Corps said that if people are forced to flee north, “they can only return to devastated areas that are littered with dangerous explosive devices and are virtually uninhabitable.”

CIA Director William J. Burns is expected to travel to Cairo on Tuesday to continue negotiations over the proposed hostage release deal, with U.S. officials hoping Israel will have a response to Hamas’s latest proposal, according to a senior administration official who spoke on the condition of anonymity to discuss the sensitive discussions. The official said Hamas’s counterproposal has “real problems” but that U.S. officials believe there is a broad frame for the two sides to come to an agreement.

The Palestine Red Crescent Society said four doctors were among those detained by Israeli forces at al-Amal Hospital in Khan Younis on Friday. The detentions took place after a raid that lasted about 10 hours, the PRCS said on social media, adding that its teams were interrogated and beaten. It said Monday that more than 8,000 civilians evacuated the hospital following two weeks of heavy military activity that prevented entry or exit to the facility, which the United Nations called a siege. The IDF did not immediately respond to a request for comment.

At least 27,947 people have been killed and 67,459 injured in the Gaza Strip since the war began, according to the Gaza Health Ministry. Israel estimates that about 1,200 people were killed in Hamas’s Oct. 7 attack.

Yasmeen Abutaleb and Frances Vinall contributed to this report.