August 4, 2018
The Standard & Poor’s credit scoring agency on Friday upgraded its credit rating for Israel, citing the Jewish state’s steady economic growth and improved debt outlook.
With the raising of its credit score from A+ to AA- with a stable outlook, Israel notched its highest ever rating from S&P and other international credit rating firms.
Prime Minister Benjamin Netanyahu hailed the upgraded rating as “a reflection of the strength of the Israeli economy.”
In announcing its decision, S&P cited Israel’s stable growth and improved fiscal position in light of the sharp reduction in net government debt.
Despite Israel’s fractious politics, S&P pointed to the passage of the 2019 budget as a sign of fiscal discipline.
“Although public debt remains relatively high, we now think that fiscal slippages leading to a significant reversal of the debt path are unlikely,” S&P said. “This is based on our belief that, absent global trade shocks, Israel’s economic growth outlook will remain solid and allow the government to accommodate pressures coming from social and infrastructure spending, as well as a potential moderate escalation of security risks.”
“Israel has demonstrated sound economic performance since the global financial crisis, with a current GDP of about $140 billion (or 50%) larger than in 2010, the current account in a sustainable surplus, and unemployment at historical lows,” it added.
The ratings agency also predicted growth of 3.3 percent a year from 2018 to 2021, which it said would be fueled by private consumption, corporate investment and exporting of services.