Fitch places Israel's credit rating on negative watch

In a statement from Fitch, it was reported that geopolitical risks stemming from the Israel-Palestine conflict were the primary factor in placing Israel's long-term local and foreign currency credit rating on negative watch. The statement noted that the negative watch reflects the risk that the current conflict could expand over a long period to include large-scale military confrontations with multiple actors, pointing out that other organizations and countries in the region could also become involved in the conflict.

The statement emphasized that an expansion of the conflict on this scale could lead to significant additional military spending, destruction of infrastructure, and a sustained shift in consumer and investment confidence, in addition to the loss of life, which could consequently cause a major deterioration in Israel's credit metrics.

The statement warned that a significant escalation of the conflict that would have a material and long-lasting impact on the economy and public finances could lead to a downgrade of the country's credit rating, while also noting that a de-escalation of the conflict could have a positive impact on the country's rating.

News Source: 12punto