Fitch Ratings has affirmed Israel's long-term foreign-currency issuer default rating at 'A' with a negative outlook. The decision reflects the country's diversified and resilient economy, strong high-value-added sectors, and solid external finances.

The negative outlook signals risks tied to ongoing geopolitical developments and their potential impact on public finances and economic performance. While the economy has shown resilience supported by strong fundamentals and policy flexibility, uncertainty surrounding security conditions could weigh on growth, investment, and fiscal outcomes.

Government debt is expected to remain elevated compared to pre-crisis levels due to increased spending needs, particularly related to defense. The fiscal deficit is projected to stay wider than in previous years, with any gradual improvement dependent on policy choices and economic conditions.

Fitch highlighted Israel's strong access to financing, backed by a deep domestic capital market, prudent debt management, current account surpluses, and substantial foreign exchange reserves. Future rating actions will depend on developments in the security environment, fiscal performance, and broader economic trends.