July 22, 2018
Despite growing security tensions, international rating agency Moody’s Investors Service has joined Standard & Poor’s (S&P) in raising its rating outlook for the government of Israel from “stable” to “positive”. The rating itself is unchanged, but the upgrade in the outlook means that there is a good chance that Israel’s rating will be upgraded in the next 12-18 months, for the first time since 2008. Israel’s current rating is A1. If the raised outlook does result in an upgrade, the rating will rise to Aa-.
S&P raised its rating outlook for Israel to “positive” a year ago, but has not yet upgraded the rating itself. Moody’s estimates that its rating will rise in the next 12-18 months if the improvement in debt levels and fiscal performance continues, despite upcoming elections. “Continued healthy growth and current account surpluses in the face of persistent geopolitical tensions would be credit positive in this respect. Furthermore, continued progress developing the Leviathan gas fields, which provides increased clarity on the potential size and timing of the economic and fiscal benefits, would also support an upward move in the credit rating,” Moody’s says.
Minister of Finance Moshe Kahlon said, “The rating outlook upgrade is further evidence of the strength and stability of the Israeli economy. All the data indicate that the economic policy that we are pursuing, including a free and responsible economy alongside strengthening the middle class and poorer sections of society, is the right way.” Accountant General Rony Hizkiyahu said, “A second rating outlook upgrade within a year by different rating agencies reflects our strong fiscal performance and highlights the importance of maintaining a policy that encourages growth while reducing the debt burden.”
Read More: https://en.globes.co.il/en/article-moodys-raises-rating-outlook-for-israel-1001246929