Fitch Credit Rating Agency: "Israel is expected to remain in political paralysis"

Fitch Ratings has determined that the election results in Israel indicate a risk of ongoing uncertainty. The credit rating remains at A with a negative outlook, and the agency assessed that the most likely scenario is the dissolution of the Knesset in January and elections in April.

Fitch Ratings has determined that the election results in Israel indicate a risk of ongoing uncertainty. Israel's credit rating remains at A with a negative outlook, and the agency noted that the rating reflects the country's situation in the coming period, which will be characterized by a transitional government or a government without a parliamentary majority. According to Fitch, if coalition negotiations fail, the Knesset will be dissolved and new elections will be held within 90 days. The outgoing government will continue to serve as a transitional government, and the country will rely on a continuing budget, making it difficult to reduce the government debt. The agency assessed that the most likely scenario is the dissolution of the Knesset in early January and new elections in early April. Fitch downgraded Israel's credit rating from A+ to A with a negative outlook back in 2024, in the midst of the war in Gaza.