The military conflict between Iran and Israel has raised geopolitical and security risk in the Middle East and some sovereigns’ credit profiles could be adversely affected if the violence escalates or spreads, Fitch Ratings says, APA-Economics reports.
The spillover from the conflict appears to be within the range that can be absorbed at Israel’s ‘A’/Negative rating level.
"Our assumption is that the fighting will remain contained between Israel and Iran, and will not persist for more than a few weeks. Israel has strong defensive countermeasures and it appears that Iranian strikes have not had a material economic impact. We believe Iran’s capacity to retaliate against Israel via proxies in Gaza and Lebanon has been damaged by Israel’s military campaigns in those regions. Both factors suggest it is likely that damage from Iran’s military response to Israel’s latest attacks will not be on a scale that would affect Israel’s rating," Rating Agency added.
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