Israel’s credit rating was downgraded by Fitch Ratings on Monday, after the agency cited concerns on the ongoing war with Hamas and geopolitical risks.
Fitch kept a negative outlook on the country’s credit, meaning it could cut the rating again in the future, as it notched down the credit rating from “A+” to “A.”
The downgrade underscores the financial toll of the war, which has also seen tens of thousands of people killed and has shaken the region and the world. Fitch said it projects a budget deficit of 7.8% of GDP in 2024 in Israel.
“The downgrade to ‘A’ reflects the impact of the continuation of the war in Gaza, heightened geopolitical risks and military operations on multiple fronts,” Fitch said in a statement.
Analysts from Fitch said the “the conflict in Gaza could last well into 2025,” and there are risks of the conflict spreading.
“In addition to human losses, it could result in significant additional military spending, destruction of infrastructure and more sustained damage to economic activity and investment, leading to a further deterioration of Israel’s credit metrics.”
This is a developing story and will be updated.
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