JERUSALEM, April 2 (Xinhua) -- Credit ratings agency Fitch on Tuesday kept Israel's credit rating at A+ while lowering the country's economic outlook to "negative" from "stable," the Israeli Finance Ministry said in a statement.
Fitch analysts explained in a commentary that the negative outlook of Israel reflects the combination of uncertainties around the fiscal trajectory and the war's duration and intensity, including the risk of regional escalation.
"We expect a near-term jump in debt/GDP and persistently higher military spending in the context of fractious domestic politics and uncertain macroeconomic prospects, which could limit Israel's ability to bring down debt in the future," they wrote.
The authors warned that the high risks of a large-scale escalation of the conflict could lead to major extra military spending, destruction of infrastructure, and sustained change in consumer and investment sentiment, leading to a large deterioration of Israel's credit metrics.
Fitch forecasts Israel's GDP growth to be 1.9 percent in 2024 and 4.1 percent in 2025 after it slumped to 1.8 percent last year.
Israeli Finance Minister Bezalel Smotrich commented that keeping the rating at A+ during the war signals confidence in the Israeli economy and economic policy.
"We will continue to take necessary measures to hedge and minimize the risks and return to a rapid growth path," he stated. ■
