Economy
Fitch: Political uncertainty is consistent with Israel's negative outlook
Fitch says post-election political uncertainty is consistent with Israel's A rating and negative outlook. It warns of difficulty passing a budget and a continued moderate rise in the debt-to-GDP ratio. Spending limits under an interim budget do not necessarily constitute lasting fiscal improvement. The report does not announce a new downgrade. Illustrative photograph: Alex Levac.
· Source: TheMarker. Illustrative photograph: Alex Levac.
According to TheMarker's report on Fitch's assessment today, uncertainty following the election is consistent with Israel's A rating and negative outlook. The report does not announce a new rating downgrade.
Fitch warns of a prolonged period of caretaker governments and unstable coalitions. According to the report, it believes the impasse could complicate approval of the 2027 budget, leaving public expenditure subject to interim-budget restrictions.
Restrictions on spending without an approved budget could briefly reduce the deficit. Fitch distinguishes a reduction caused by political paralysis from lasting improvement in public finances. It expects the government debt-to-GDP ratio to continue rising moderately. A negative outlook signals a risk of a future downgrade; it is not itself a downgrade.
Source: TheMarker
