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Israel’s credit rating downgraded from A+ to A amid war concerns

Finance Minister Bezalel Smotrich says downgrade is “natural” amid war, increased regional tensions.

By World Israel News Staff

International credit rating agency Fitch downgraded Israel’s national credit score from A+ to an A on Monday, saying it did so due to concerns over the Israel-Hamas war and a looming regional conflict that could be sparked by imminent attacks by Hezbollah and Iran.

“In our view, the conflict in Gaza could last well into 2025 and there are risks of it broadening to other fronts,” Fitch said in a statement.

They added that beyond the “continuation of the war in Gaza,” factors such as “heightened geopolitical risks and military operations on multiple fronts” also contributed to the decision.

On Monday, as media reports indicated that an Iranian attack on Israel would occur within the coming 24 hours, the Tel Aviv Stock Exchange fell by 1%, along with the shekel falling 1.7% against the dollar.

Finance Miniter Bezalel Smotrich said that the downgrade did not reflect a downturn in the Israeli economy, which he said is still strong, despite the ongoing conflict.

“Israel is in the midst of an existential war – the longest and most expensive in its history,” Smotrich said in a media statement. “The war is being waged on several fronts and has been going on for almost a year.”

The minister added that “the downgrade amid the war and the geopolitical risks it creates is natural.”

He pledged that the government would “pass a responsible [2025] budget that will continue to support all the needs of the war while maintaining fiscal frameworks and promoting growth,” and that Israel’s credit rating will once again be restored to an A+ “very quickly.”

Israel’s high-tech industry has seen wide-scale layoffs in recent weeks, though it’s unclear if they are related to the war or a general downturn in the industry.

Intel, the largest private employer in the country’s high-tech sector, has over 11,000 Israeli employees.

However, the company recently announced that it would engage in its third round of layoffs in less than a year, with hundreds of people expected to lose their jobs.