(Reuters) – Fitch on Tuesday placed Israel’s sovereign debt rating of “A+” on rating watch negative and warned a major escalation of the ongoing conflict with the Palestinian Islamist group Hamas could result in a negative rating action.
The ratings agency said the risk that others hostile to Israel could join the conflict at scale has risen significantly.
However, prevailing conditions likely support its current rating, Fitch said.
“The combination of Israel’s dynamic, high-value added economy, the record of resilience to regional conflict, preparedness for military confrontations, solid fiscal and external metrics and cash buffers make it unlikely a relatively short conflict largely confined to Gaza will affect Israel’s rating,” it said in a statement.
Israel has never been downgraded by Fitch and rival rating agencies S&P Global and Moody’s.
(Reporting by Aatrayee Chatterjee in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila)
