Fitch Ratings has downgraded Israel’s credit rating from A+ to A due to ongoing geopolitical risks and the prolonged conflict in Gaza.
This downgrade reflects concerns about the economic toll of continued military operations and increased regional tensions, with the outlook remaining negative, suggesting potential for further downgrades.
The decision has negatively impacted the Israeli shekel and stock prices, prompting Finance Minister Bezalel Smotrich to describe the current situation as Israel’s longest and most costly economic war.
This follows similar actions by other major credit rating agencies earlier in the year, intensifying economic pressures and the cost of living in Israel.
Amidst these developments, there have been heightened tensions with Iran, with reports suggesting expectations of an imminent attack from Iran, prompting diplomatic efforts from the United States, United Kingdom, France, Germany, and Italy to defend Israel.
However, subsequent assessments indicated that the anticipated Iranian attack might not occur immediately, following intense diplomatic engagements aimed at de-escalation.
