Fitch and Moody’s: Israel’s economic risks have decreased slightly

International rating agencies Fitch and Moody’s have issued communiqués regarding the ceasefire agreement between Israel and Hezbollah.

Fitch reported less pressure for an additional downgrade of Israel’s credit rating amid the ceasefire, which should lead to a reduction in the burden on the state budget.

At the same time, the company notes “the fragility of the truce and the low chances of a ceasefire in the Gaza Strip.”

The company left the forecast for the state budget deficit for 2024 at 7.8%, and increased it for 2025 from 4.8% to 5.2%. The company noted a high level of uncertainty regarding fiscal measures in the medium term, including the risk of continued high levels of government budget deficits in 2026 and beyond due to the continued need for high defense spending.

Moody’s said the ceasefire between Israel and Hezbollah reduces one factor of geopolitical risk, but other factors remain unchanged and it is too early to draw conclusions about their sustained decline.

The agency notes that the Israeli government has not yet presented any plan regarding the situation in Gaza that could provide Israel with long-term security.

The communiqué also talks about internal political risks remaining at a high level.

By Editor

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