Fitch keeps Israel’s A+ credit rating, in spite of uncertain economic outlook

Fitch Ratings maintained Israel’s “A+” sovereign credit rating today and removed the country from “rating watch negative” despite concerns over Israel’s genocidal bombing campaign in Gaza, Reuters reports.

At the outset of the aggression in October, Fitch placed Israel’s sovereign debt rating on negative watch and warned a major escalation of the conflict could result in a downgrade.

However, the risk of a ratings downgrade, similar to that dealt by Moody’s in February, has not been completely removed; Fitch ratings’ outlook for Israel remains negative to “reflect the combination of uncertainties around the fiscal trajectory and the war’s duration and intensity, including the risk of regional escalation.”

Fitch said it foresees a near-term jump in the debt to GDP ratio and persistently higher military spending amid Israel’s fractious domestic politics and an uncertain economic outlook, which could limit Israel’s ability to bring down debt in the future.

Responding to Moody’s report in February, Israeli Prime Minister Benjamin Netanyahu said Tel Aviv’s economy is strong, claiming the downgrading has nothing to do with the economy but due to the war. “The rankings will rise again once we win the war, and we will win,” he said.

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