By Stephen Nakrosis
S&P Global Ratings said it lowered its long-term foreign and local currency sovereign credit ratings on Israel to A-plus from AA-minus, citing geopolitical risks.
S&P also said it has a negative outlook on the country, reflecting risks that military conflict could escalate and "affect Israel's economic, fiscal, and balance-of-payments parameters more significantly than we currently expect."
S&P mentioned that recent confrontations with Iran have increased Israel's geopolitical risks, which had already been at an elevated level. While S&P expects a wider regional conflict will be avoided, conflict with Hamas and Hezbollah appear set to continue throughout this year, it said.
S&P also said it expects Israel's general government deficit will widen to 8% of GDP this year, citing increased defense spending as the prevailing factor.
Write to Stephen Nakrosis at stephen.nakrosis@wsj.com
(END) Dow Jones Newswires
04-18-24 1928ET
