Fitch Ratings announced late on Monday that it was lowering Israel's credit rating from A+ to A with a negative outlook after already lowering the rating once, in February.
The decision puts Fitch in line with other international credit companies - Moody's and S&P which decided to lower the ratings a number of months ago.
The decision comes because of the prolonged war and the regional instability and was made before the concern of an Iranian attack on Israel
Fitch estimated that the government's deficit would increase to 7.8% of GDP in 2024, due to the high cost of the war and the funding of displaced Israelis from the north. In their report, Fitch analysts said income in the first half of the year exceeded expectations but they expected expenditure on security to increase by 1.5% indefinitely.
Officials in Israel were concerned that further security concerns would lead Moody's and S&P to again lower Israel's credit rating, within the coming weeks, especially because of the government's failure to take necessary steps to lower the deficit in its budget after it already reached the unusual level of 8.1% of GDP.