The international credit rating agency Fitch has downgraded Israel’s sovereign credit rating from AA- to A, citing concerns over the country’s fiscal position and political instability.

The rating cut, announced on Friday, marks the first time in over a decade that Israel’s credit score has been lowered by Fitch.

The agency pointed to the country’s widening budget deficit, elevated public debt levels, and the ongoing political turmoil as the key factors behind the decision.

“The downgrade reflects a deterioration in Israel’s fiscal position, with the general government deficit expected to remain elevated over the medium term, and a further rise in public debt,” Fitch said in a statement.

The credit rating is an important indicator of a country’s creditworthiness and can have significant implications for its ability to borrow money on international markets. A lower rating typically means higher borrowing costs for the government and increased investor risk.

In response to the downgrade, the Israeli Finance Ministry acknowledged the concerns raised by Fitch but expressed confidence in the country’s economic resilience.

“Israel’s economy remains strong and resilient, and we are confident in our ability to address the challenges ahead,” the ministry said in a statement.

The rating cut comes at a sensitive time for Israel, as the country grapples with a prolonged political crisis that has led to multiple inconclusive elections in recent years.

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The instability has raised concerns about the government’s ability to implement necessary fiscal reforms and address the country’s economic challenges.

Analysts suggest that the downgrade could put additional pressure on the Israeli government to implement austerity measures and structural reforms to shore up the country’s fiscal position and regain the confidence of international investors.