Israel faces cascading DEBT COLLAPSE as Jewish state hit with credit rating downgrade

 f Israel's war on Hamas and the Palestinian people in general continues to grow and expand to other fronts, the global credit rating agency S&P is warning that it might cut the Jewish state's sovereign credit rating.

Last October, S&P maintained Israel's current "AA-" rating, despite the war on Gaza. It did, however, lower Israel's credit outlook from "stable" to "negative," citing the possibility of Israel's war on Gaza spilling over into other territories.

Should Israel's war on Gaza become a regional affair, which already appears to be in the works, the Jewish state's broader economy will be seriously impacted, as will the broader humanitarian crisis throughout the Middle East.

Maxim Rybnikov, director of S&P's EMEA sovereign and public finance ratings, warns that Israel's credit rating will likely be downgraded should there be a direct confrontation with Hezbollah in Lebanon or Iran.

"We could also lower the ratings if the impact of the conflict on Israel's economic growth, fiscal position and balance of payments proves more significant than we currently project," Rybnikov said. 

Israeli economic woes

In 2024, S&P expects Israel's economy to grow by just 0.5 percent, this compared to a cumulative 2023-24 budget deficit of 10.5 percent – "but there are downside risks to these assumptions," Rybnikov said.

"It is already clear that defense spending will be higher in the years to come and the longer-term impact of the war on FDI [foreign direct investment] flows, investor sentiment and other areas remains uncertain."

Should Israel's conflict with the Palestinians be resolved, S&P could restore Israel's credit outlook to "stable" because "peace," in that context, would mean fewer regional and domestic security risks to upset the economy.

One wonders if S&P is considering the possibility that Israel gets decimated by Lebanon and / or Iran, two Middle Eastern powerhouses that one commenter on a news story about all this described as having "much superior armed forces."

"Should the U.S. be foolish enough to be drawn in on Israel's side – and so far, it looks like that's the last thing they are planning to do – then the U.S.'s last slide down the asymptote to the bottom could truly begin," this person added.

"When the dust clears, S&P might be hard put to find an economy in Israel to downgrade."

Another joked that these latest warnings from the S&P "means Hamas must be hiding in S&P's offices," the suggestion being that "Hamas" is merely an excuse by Israel to fulfill its brutal Zionist agenda.

"Israel's credibility rating is zero," wrote someone else. "This has become a defining moment in history that will bring with it consequences beyond just a credit rating."

"I'm in America and I will never buy Israeli products ever again in my lifetime," said another. "I won't buy from our American corporations ever again, either."

Already in the eyes of much of the world, Israel has been downgraded, expressed someone else about how the Jewish state really jumped the shark with this whole October 7 terror attack situation.

The recent ruling from the International Court of Justice (ICJ) means that the rest of the world has been put on notice to pressure Israel to stop its genocide of the Palestinian people. Should Israel forge on, it can expect serious economic sanctions.

"Israel has virtually no territory with enough natural resources to make a difference once severe sanctions are imposed by the world on their state," another commenter added to the conversation. "If they go ahead with genocide of Palestinian peoples, the sanctions will be permanent."

Israel faces cascading DEBT COLLAPSE as Jewish state hit with credit rating downgrade Israel faces cascading DEBT COLLAPSE as Jewish state hit with credit rating downgrade Reviewed by Your Destination on February 14, 2024 Rating: 5

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