Fitch Maintains Israel's Credit Rating Amid Military Strains

Fitch Ratings reaffirmed Israel's 'A' credit rating but retained a negative outlook due to ongoing military activities and rising public debt. U.S.–Israeli strikes on Iran have raised deficit concerns and Israel's domestic politics threaten fiscal reforms. Military spending is expected to remain high, impacting economic stability.

Global ratings agency Fitch reaffirmed Israel's 'A' credit rating on Friday, despite a negative outlook driven by concerns over rising public debt and prolonged military operations.

U.S.–Israeli strikes on Iran have escalated worries about Israel's deficit, occurring soon after a ceasefire with Gaza prompted rating upgrades from S&P and Moody's.

Fitch cited Israel's fractious domestic politics as a potential obstruction to fiscal reform. It anticipates high military spending through 2026, with a central government budget deficit set to expand, though it may narrow by 2027 if conflicts de-escalate.

(With inputs from agencies.)