March 27 (Reuters) – Global ratings agency Fitch reaffirmed Israel’s long-term foreign-currency rating at “A” with a negative outlook on Friday, adding that rising public debt levels and ongoing war-related risks could weaken the country’s fiscal trajectory.
Fitch forecast military expenditure will remain high in 2026, well above pre-war levels, as Israel’s involvement in Lebanon intensifies and operations continue.
It also expects Israel’s central government cash budget deficit to widen this year before narrowing in 2027 as military spending declines.
“Israel’s recent and ongoing military operations have somewhat diminished geopolitical risks to the ratings and demonstrated a highly effective defensive capability”, the ratings agency said, although it warned the duration and scope of the current conflict remains uncertain.
(Reporting by Raechel Thankam Job and Yamini Kalia in Bengaluru; Editing by Anil D’Silva)
