Fitch's recent downgrade of US government debt reflects concerns over the country's deteriorating fiscal governance standards and the unlikely prospects of serious fiscal reform, signaling a change in perceptions that may have more damaging effects than the 2011 downgrade by S&P; factors such as broken supply chains, rising inflation, and a shift away from the US dollar as a safe haven currency contribute to a potential US slowdown and impact on global economic power.
The Bank of Israel has maintained its benchmark interest rate but warned of potential rate hikes if inflation does not continue to moderate and the shekel weakens further. Despite signs of easing inflation, the central bank highlighted the possibility of higher borrowing costs in the future. The shekel has depreciated by over 8% against the US dollar this year, contributing to higher inflation. The bank sees the economy growing at a rate of 3% in 2023 and 2024 but warns of risks if the proposed judicial overhaul leads to increased risk premium and further devaluation of the shekel.
Fitch has affirmed Malta's A+ credit rating, citing strong economic growth and low unemployment, but expressed concerns about fiscal deficits and high inflation, stating that the country could face a downgrade if these issues worsen.
