
A ceasefire in Gaza’s ongoing conflict could positively impact Israel’s pressured credit rating, Fitch's top sovereign rating analyst said on Thursday, according to Reuters.
Israel’s credit rating, currently rated "A," remains on a downgrade warning, also known as a "negative outlook" in the terminology used by rating agencies.
"We've got Israel on negative, I guess that's something that's really related to public finances associated with the war," said James Longsdon, Fitch's head of sovereign ratings, at a firm-hosted conference. "To the extent that (the war) can sort of stabilize, that would be positive I think there."
His comments follow the agreement between Israel and Hamas on a ceasefire and hostage release deal, which was announced on Wednesday but was not yet signed when Longsdon spoke.
Last August, Fitch downgraded Israel's credit rating to “A” from “A+” with a negative outlook, citing “the continuation of the war in Gaza, heightened geopolitical risks and military operations on multiple fronts.”
In September, Moody's credit rating agency downgraded Israel's rating from A2 to Baa1 and maintained a negative outlook.
In November, following the ceasefire between Israel and Hezbollah in Lebanon, Moody's issued an update on Israel’s credit rating, saying that it is too early to determine whether the ceasefire agreement with Hezbollah has "significantly and sustainably" mitigated the risks that led to the agency's decision to downgrade Israel's sovereign credit rating.