(Credit: AFP)
Fitch Ratings has downgraded Israel's long-term foreign credit rating from "A+" to "A," citing the ongoing Gaza conflict, increased geopolitical risks, and military operations on multiple fronts. The agency has also assigned a negative outlook. Despite this, the rating remains high, keeping Israeli government bonds in the category of the safest debt securities, over 10 months into the Gaza war.
Fitch's decision reflects concerns about the war's impact on public finances, forecasting a budget deficit of 7.8% of GDP in 2024 and a debt-to-GDP ratio above 70 percent in the medium term. In early April, Fitch had previously differentiated itself from Moody's and Standard & Poor's by removing Israel from debt watch but maintaining its "A+" rating with a negative outlook.