{"id":292887,"date":"2024-08-14T07:35:06","date_gmt":"2024-08-14T07:35:06","guid":{"rendered":"https:\/\/www.thetruthseeker.co.uk\/?p=292887"},"modified":"2024-08-16T07:20:56","modified_gmt":"2024-08-16T07:20:56","slug":"fitch-downgrades-israels-credit-rating-warning-war-could-last-well-into-2025","status":"publish","type":"post","link":"https:\/\/www.thetruthseeker.co.uk\/?p=292887","title":{"rendered":"Fitch downgrades Israel\u2019s credit rating, warning war could last well into 2025"},"content":{"rendered":"

Reuters and Sharon Wrobel \u2013 Times of Israel Aug 13, 2024<\/strong><\/h1>\n

Credit ratings agency Fitch downgraded Israel\u2019s credit rating from A+ to A on Monday, citing worsening geopolitical risks as the Israel-Hamas war drags on.<\/p>\n

It also kept the rating outlook negative, which means a further downgrade is possible.<\/p>\n

\u201cIn our view, the conflict in Gaza could last well into 2025 and there are risks of it broadening to other fronts,\u201d the ratings agency said in a statement.<\/p>\n

Finance Minister Bezalel Smotrich downplayed the move as \u201cnatural\u201d amid a war and said Israel\u2019s economy would bounce back following responsible steps he plans to advance.<\/p>\n

Fears that the conflict in Gaza could turn into a broader Middle East war escalated late last month after the killing of Hamas leader Ismail Haniyeh in Iran and top Hezbollah military commander Fuad Shukr in Beirut.<\/p>\n

Israel\u2019s shekel fell as much as 1.7% against the dollar on Monday and stocks ended over 1% lower in Tel Aviv, as investors fret over a possible attack on Israel.<\/p>\n

Heightened tensions between Israel and Iran and its allies could imply significant additional military spending, destruction of infrastructure and damage to economic activity and investment, Fitch said.<\/p>\n

The ratings agency expects the Israeli government to permanently increase military spending by close to 1.5% of GDP versus pre-war levels as the country strengthens its border defenses.<\/p>\n

\u201cPublic finances have been hit and we project a budget deficit of 7.8% of GDP in 2024 and debt to remain above 70% of GDP in the medium term,\u201d Fitch said. It forecast that the country\u2019s debt will remain on an upward trend beyond 2025 if higher military spending and economic uncertainties continue.<\/p>\n

Other factors driving the downgrade are the country\u2019s \u201cpolitical fractiousness, coalition politics and military imperatives\u201d that are putting new fiscal consolidation measures at risk, Fitch added.<\/p>\n

Fitch is the third global credit agency to lower Israel\u2019s credit rating since the outbreak of the war, joining S&P and Moody\u2019s. In April, Fitch removed Israel from \u201ccredit rating negative\u201d and affirmed the country\u2019s A+ credit rating \u2014 but with a negative outlook \u2014 citing uncertainty about the duration and magnitude of the war with Hamas and its toll on the government\u2019s debt burden.<\/p>\n

In response to the downgrade, the Finance Ministry\u2019s top accountant Yali Rothenberg called on the government to create as much certainty as possible for the Israeli economy, investors and rating agencies by acting swiftly to formulate a responsible state budget for 2025.<\/p>\n

Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Fitch is the third global credit agency to lower Israel\u2019s credit rating since the outbreak of the war in Gaza, joining S&P and Moody\u2019s.<\/p>\n","protected":false},"author":39262,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[66,37],"tags":[],"class_list":["post-292887","post","type-post","status-publish","format-standard","hentry","category-Economics","category-Israel_Anti-Semitism_Zionism_and_US-UK_allies"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/292887","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/users\/39262"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=292887"}],"version-history":[{"count":1,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/292887\/revisions"}],"predecessor-version":[{"id":292889,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/292887\/revisions\/292889"}],"wp:attachment":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=292887"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=292887"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=292887"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}