Fitch Ratings downgrades Israel's credit rating amid war, regional threats
Regional tensions and the continuation of the war contributed to the downgraded credit rating, along with a very high level of uncertainty and a continued increase in security expenses
The international credit rating company Fitch Ratings announced early Tuesday that it was lowering the credit rating of the State of Israel from an A+ level to an A level.
Regional tensions, the continuation of the war, a high level of uncertainty, and expected increases in security expenses are cited as reasons behind the new rating. In addition, Fitch noted the political instability in Israel, which has escalated since October 7 and recently intensified around the issue of ultra-Orthodox conscription.
Fitch estimates that Israel will end the year with a deficit of 7.8 percent - compared to the Finance Ministry's forecast of 6.6 percent. As of last week, the deficit stands at 8.1 percent. Fitch is the third rating company to downgrade Israel's credit rating since the beginning of the war. In April, S&P downgraded Israel's credit rating, and in February, Moody's downgraded the credit rating as well.
"The State of Israel is in the midst of the longest and most expensive existential war in its history, a war that is being waged on several fronts simultaneously and has already lasted almost a year," Finance Minister Bezalel Smotrich said in response. "The downgrade following the war and the geopolitical risks it generates is natural. The Israeli economy is strong and we are navigating it correctly and responsibly. Economic indicators point to the resilience of the economy and the high confidence we enjoy in the markets."