WASHINGTON – United States ratings agency Moody’s has put the Israeli government’s A1 credit ratings on review for downgrade, citing the “unexpected and violent conflict between Israel and Hamas”.

The crisis, sparked by the deadly attack by Hamas militants on southern Israel on Oct 7, increases the likelihood of “longer-lasting and material credit impact”, Moody’s said in a statement on Thursday.

More than 1,400 people were killed in the attack, mostly civilians who were shot, mutilated or burned to death on the first day of the raid, according to Israeli officials.

Israel responded to the attacks by unleashing a barrage of air strikes on the Gaza Strip, killing at least 3,785 Palestinians so far, most of them civilians, according to the Hamas-run Health Ministry.

Moody’s announced that it was putting a number of the Israeli government’s credit ratings on review for a downgrade, including its long-term foreign and local currency ratings, because of the war.

“Israel’s credit profile has proven resilient to terrorist attacks and military conflict in the past,” it said.

“However, the severity of the current military conflict raises the possibility of longer-lasting and material credit impact,” it added.

Moody’s statement comes after Fitch Ratings announced on Tuesday that it was placing Israel’s A+ foreign and local currency issuer default ratings on “Ratings Watch Negative”.

In its announcement, Fitch cited “the heightened risk of a widening of Israel’s current conflict to include large-scale military confrontations with multiple actors, over a sustained period of time”. AFP