Credit rating agency downgrades Israel, gives negative outlook

Credit rating agency Fitch downgraded Israel to A on Monday, a drop from A+.

The agency also gave the country a Negative Outlook.

"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, adding that it projects a budget deficit of 7.8 percent of GDP in 2024.

"In our view, the conflict in Gaza could last well into 2025 and there are risks of it broadening to other fronts. 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," it said.