Fitch downgrades Israel's credit rating, says Gaza war may last 'well into 2025'

Credit rating agency Fitch downgraded Israel’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to A on Monday, a drop from A+.

The agency once again gave the country a negative outlook, meaning a further downgrade is possible.

Fitch attributes its decision to the continuation of Israel’s war on Gaza, which has so far killed over 39,000 Palestinians.

“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.

Fitch cites the rise in regional tensions following the deadly attack in the occupied Golan Heights’ Majdal Shams on 27 July, which killed 12 children, as well as Israel’s assassination of a top Hezbollah commander in Beirut and its suspected killing of Hamas leader Ismail Haniyeh in Tehran, as contributors to the negative outlook.

Read more: Fitch downgrades Israel's credit rating, says Gaza war may last 'well into 2025'