Jerusalem, 31 January, 2026 (TPS-IL) — Moody’s upgraded Israel’s credit outlook from “negative” to “stable”, signaling improving confidence in the country’s economic and geopolitical position. While the sovereign rating remains at BAA1, the shift reflects a clear easing of risk compared with the peak of the war period.
According to Moody’s, geopolitical pressures have moderated, and the Israeli economy has demonstrated notable resilience despite operating under exceptionally challenging security conditions and fighting on multiple fronts. Economic activity has recovered more strongly than initially expected, supported by solid institutions, a diversified economic base, and continued access to international capital markets.
The agency also highlighted the stability of Israel’s financial system and its capacity to absorb shocks, even as defense spending and security-related costs remain elevated. Overall, the stable outlook underscores growing confidence that Israel can sustain economic strength and financial stability while navigating ongoing regional challenges.