Fitch Ratings downgrades Israel's credit rating amid current Gaza war

(MENAFN) Fitch Ratings has downgraded Israel’s credit rating from "A+" to "A," citing increased geopolitical risks due to the ongoing conflict in Gaza. The rating agency has also maintained a negative outlook on Israel’s credit rating, signaling the potential for further downgrades if conditions worsen. The decision reflects concerns over the protracted and escalating conflict, which has resulted in significant casualties and a humanitarian crisis in Gaza. The latest escalation began after a Hamas attack on southern Israel on October 7, raising fears that the conflict could persist into 2025 and potentially spread to other areas.

Israeli Finance Minister Bezalel Smotrich commented on Twitter, acknowledging that the downgrade was a natural consequence of the war and its associated risks. The situation has further been aggravated by recent geopolitical events, including the assassination of Hamas leader Ismail Haniyeh in Iran and the killing of Hezbollah’s top military commander Fuad Shukr in Beirut. These incidents have intensified fears of a broader regional conflict, contributing to financial instability in Israel. On Monday, the shekel depreciated by up to 1.7 percent against the dollar, and stock markets in Tel Aviv saw declines of more than 1 percent, as investors expressed concerns about potential attacks and increased military spending. Fitch highlighted that ongoing tensions with Iran and its allies could lead to further military expenditures, infrastructure damage, and economic disruptions.  

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