NEW YORK, April 2 (MENA) - Fitch Ratings affirmed Israel’s A credit rating on Monday, but maintained a negative outlook as the rating agency warned that the country faces “rising public debt, domestic political and governance challenges and uncertain prospects for the conflict in Gaza.”

“The renewed hostilities [in Gaza] could involve intense air and ground operations and could last several months, but we believe fewer reserves will be mobilized than in 2023, reducing the impact on the labor force, the economy and public finances,” Fitch said, according to the Times of Israel Wednesday.

“We expect Israel will remain heavily involved in Gaza over the medium term,” it added.

On March 18, Israel renewed intensive military operations throughout Gaza amid an ongoing impasse in the hostage negotiations with Hamas, shattering a fragile two-month ceasefire.

In January, Fitch raised prospects that a ceasefire in the war in Gaza should be positive for Israel’s under-pressure credit rating.

All three rating agencies — Fitch, Moody’s and S&P Global — lowered Israel’s credit score last year, citing concern over the ballooning military and civilian costs of the intense and prolonged fighting in both Gaza and Lebanon.

The rating agencies maintained a negative outlook, meaning that the country could be facing further downgrades. A lower rating raises credit costs for the government, businesses and households. (MENA)

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