Fitch Ratings To Keep Israel’s Credit Worthiness Score an A+

American credit rating giant Fitch Ratings disclosed on Tuesday that Israel’s “Rating Watch Negative” (RWN) designation was being removed and that the country would keep its “A+” score. The announcement has subverted some analysts’ predictions that the war in Gaza and greater instability in the region would drive down the country’s sovereign debt rating.  

Considered one of the “Big Three” credit rating agencies along with Moody’s and Standard & Poor’s, Fitch broke with the former, which downgraded Israel’s rating from A1 to A2 in February. After war erupted in Gaza last October, Fitch assigned Israel a preliminary RWN label, citing the risk of a major regional escalation in the conflict. 

While Tuesday’s announcement is being celebrated in both Israel’s private and public sectors as a symbol of the country’s economic resilience, Fitch was also sure to clarify that a future downgrade is still entirely possible for a variety of factors. According to the agency, “Geopolitical risks associated with the war in Gaza remain elevated, and escalation risks remain present, but Fitch believes the risks to the credit profile have broadened and their impact may take longer to assess, so he has removed the RWN on Israel’s ‘A+’ rating.” 

Fitch noted that Israel would still be placed under a “Negative Outlook” given the continued risk of “large-scale military confrontations with multiple actors,” such as Hizbullah and other Iran-aligned groups. Similarly, concerns regarding Jerusalem’s massive surge in defense spending and overall spending increase despite a 6.6% drop in revenue.