CNN  —  Israel’s credit rating was downgraded by Fitch Ratings on Monday, after the agency cited concerns around the ongoing war with Hamas and geopolitical risks. Fitch kept a negative outlook on the country’s credit, meaning it could cut the rating again in the future, as it notched down the credit rating from “A+” to “A.” The downgrade underscores the financial toll of the war, which has also seen tens of thousands of people killed and has shaken the region and the world. Analysts from Fitch said the “the conflict in Gaza could last well into 2025,” and there are risks of the conflict spreading. “The downgrade to ‘A’ reflects the impact of the continuation of the war in Gaza, heightened geopolitical risks and military operations on multiple fronts,” Fitch said in a statement. “In addition to human losses, it could result in significant additional military spending, destruction of infrastructure and more sustained damage to economic activity and investment, leading to a further deterioration of Israel’s credit metrics.” Palestinians inspect the damage after an Israeli strike on a school in Gaza City, August 10, 2024. Mahmoud Issa/Reuters Related article Israel and US brace for Iranian attack as diplomats push hard for Gaza ceasefire Downgrades in credit ratings could make it more difficult for a country to borrow money. An “A” rating is still considered a high credit quality. The agency predicts Israel’s budget deficit to reach 7.8% of its GDP in 2024, compared to 4.1% in 2023. The central government’s budget deficit is centered on military operations, mitigating economic disruptions, and also relocation expenses for the northern part of Israel as the potential for another front with Lebanese militant group Hezbollah looms in the coming weeks.. Fitch also expects Israel’s debt-to-GDP to remain above 70% into 2025, whereas the median A rating ratio is 55%. Fitch said a de-escalation of the conflict and fiscal reforms that lower the debt-to-GDP ratio could help the the country get its rating back up. Moody’s Investor Service downgraded Israel’s credit rating from A1 to A2 in February. Moody’s said the primary driver of its decision was an “assessment that the ongoing military conflict with Hamas, its aftermath and wider consequences materially raise political risk for Israel as well as weaken its executive and legislative institutions and its fiscal strength, for the foreseeable future.” This is a developing story and will be updated.