2024-04-05 18:44:57
The international rating agency Fitch confirmed Israel’s credit rating at A+, but changed the outlook from stable to negative.
This was reported by The Times Of Israel news agency.
Fitch explained its decision by the projected increase in the country’s debt relative to GDP and the continued increase in defense spending in the near future. According to the company, although the geopolitical risks associated with the conflict in the Gaza Strip remain high.
There is now potential for further escalation and the agency acknowledges that these risks have led to increased threats to credit profiles. Regarding the update of the rating outlook, the company notes that the “negative outlook” reflects a combination of uncertainty in financial development, as well as the duration and intensity of the military conflict, including the risk of its expansion at the regional level.
Fitch forecasts that Israel will end 2024 with a deficit of 6.8% of GDP, which will narrow to 3.9% by 2025. In addition, the company expects the debt-to-GDP ratio to increase, although this value will remain lower than in 2021. Fitch also notes that “the interim government will likely collapse after the initial stage of hostilities has ended, and perhaps even sooner, with the return of the original coalition to power.”
Earlier, “Cursor” wrote that the international rating agency Moody’s published a notice to investors, in which it directly warned that with further steps in judicial reform, the forecast for Israel’s credit rating could be adjusted from positive to stable and even worsen.
2024-04-05 18:44:57