Fitch Reaffirms Israel's Rating Amid War Risks
Fitch Ratings reaffirmed Israel's long-term foreign-currency rating at 'A' with a negative outlook due to rising public debt and war-related risks. The agency expects military spending to remain high and the budget deficit to widen in the short term, but improve by 2027.
Global ratings agency Fitch has maintained Israel's long-term foreign-currency rating at 'A', while placing a negative outlook due to potential fiscal challenges posed by increasing public debt and persistent war-related risks.
Fitch predicts that military expenditure will continue to be elevated through 2026 as Israel's military activities in Lebanon intensify. This is expected to expand the central government’s budget deficit this year, with an anticipated reduction by 2027 as military spending eases.
The agency acknowledged that Israel's recent military actions have reduced some geopolitical risks. However, Fitch cautioned that the uncertain duration and scope of the ongoing conflict could impact future assessments.
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