Israel’s Credit Rating Cut by Fitch as Gaza War ‘Could Last Well into 2025’

The agency retained a negative outlook on the credit, signaling it could cut the rating further in the future.

As the firm listed the rating drivers, such as heightened geopolitical risks amid ongoing military operations, it voiced the opinion that the conflict in Gaza “could last well into 2025,” and cited “risks of it broadening to other fronts.”

The rating agency went on to cite Israel’s projected budget deficit of 7.8% of GDP in 2024, and a debt set to “remain above 70% of GDP in the medium term.” Credit metrics were seen as likely to deteriorate as a result of hiked up military spending, destruction of infrastructure, and further damage to economic activity and investment.

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Back in February, Moody’s Ratings gave Israel it’s first-ever sovereign downgrade. At the time, it cut its credit rating by one notch to A2 with a negative outlook. In response, an overly-optimistic Prime Minister Benjamin Netanyahu assured that Israel’s credit rating would “go back up the moment we win the war – and we will win the war.”