Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

S&P Cuts Israel's Growth due to War on Gaza

Wed 15 Nov 2023 | 11:47 PM
Taarek Refaat

Standard & Poor's (S&P) credit rating agency expected Israel's economy to grow by only 0.5% over the next year, compared to 2.8% in previous expectations, due to the consequences of the war on the Gaza Strip.

The agency said in a statement that its expectations for the current year indicate that the economy will grow by 1.5%, which is less than the Bank of Israel’s estimate issued on October 23.

Last month, the Bank of Israel reduced growth expectations to 2.3% this year, compared to 3% in previous expectations.

The Israeli Central Bank expected the gross domestic product to grow by 2.8% during 2024, an estimate that economists on the Tel Aviv Stock Exchange described as optimistic.

Standard & Poor's said it may return Israel's credit outlook from negative to stable if the conflict is resolved, amid a decline in regional security and internal risks.

It also expected a 5% contraction in GDP in Q4 of 2023, compared to the third quarter, with a decline in all spending components, including domestic demand, exports, and imports.

Last month, JP Morgan Chase said that the Israeli economy may contract by 11% on an annual basis in the last three months of this year, with the escalation of the war in the Gaza Strip.