The international rating agency S&P announced that Israel’s credit rating and rating outlook will remain unchanged at AA- and stable, respectively. This is positive news for Israel, which will be able to continue increasing debt on more favorable terms and at relatively low interest rates. As part of its considerations, S&P cited Israel’s strong macroeconomic performance including a low debt level and a stable balance of payments.
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The credit rating is AA- higher than Moody’s rating for Israel which is A1. Moody’s last month downgraded Israel’s credit outlook from positive to stable due to political divisions in the country over the planned judicial reform. Regarding the political situation in Israel, Standard & Poor’s said, “Our base scenario assumes that some kind of consensus will be created that will allow dealing with political tensions around this issue.”
Although the rating and forecast remained unchanged, Standard & Poor’s sharply lowered its GDP growth forecast for Israel to 1.5% in 2023 due to domestic political wrangling and the global economic slowdown. Israel’s economy grew 6.5% last year and the Bank of Israel forecast growth of 2.5%-3% in 2023. Earlier this week, the International Monetary Fund cut Israel’s growth forecast for 2023 from 2.9% to 2.3%. Standard & Poor’s expects Israel’s growth rate to pick up to 3.5% next year as the technology sector recovers.
Published by Globes, Israel business news – en.globes.co.il – on May 13, 2023.
© Copyright Globes Publisher Itonut (1983) Ltd., 2023.
