Israel's outlook improved to "stable" by Moody's amid easing geopolitical tensions

Jan 30 (Reuters) - Credit ratings agency Moody's revised Israel's outlook to "stable" from "negative" on Friday, saying that the ?country's exposure to geopolitical risks has materially eased from ?very high levels. The country, which was ?at war in Gaza for ?over two ?years, reached a ceasefire with the Palestinian militant group ?Hamas in October. While ?the ceasefire has halted most fighting, it has not stopped entirely, and ?both sides have ?accused ?each other of violating the deal's provisions.

"We expect Israel's geopolitical and security environments to remain ?fragile, with tensions occasionally flaring up, possibly resulting in ceasefires breaking and even military conflicts re-emerging," Moody's said in its report, while maintaining Israel's local and ?foreign ?currency ratings at "Baa1". Israel posted a budget deficit of 4.7% of gross ?domestic product in 2025 earlier this month, down from 6.8% in 2024 as it recorded stronger revenue, which offset its defense spending amid the war in Gaza. The revision in outlook follows ?S&P, which revised its outlook on the country in November after the ceasefire agreement. (Reporting by Unnamalai ?L in Bengaluru; Editing by Leroy Leo)