The S&P rating agency leaves Israel’s credit rating unchanged

The S&P rating agency leaves Israel’s credit rating unchanged
The S&P rating agency leaves Israel’s credit rating unchanged

The rating agency S&P left Israel’s rating unchanged, and left the rating forecast stable, about a month after Moody’s lowered Israel’s credit rating horizon from a positive trend to stable | Netanyahu and Smotrich: “An expression of confidence in the correct economic policy we are leading”

About a month after Moody’s rating threat lowered Israel’s credit rating horizon from a positive trend to stable and warned against the consequences of the legal reform, the S&P rating agency last night (Friday) left Israel’s rating unchanged, leaving the rating forecast stable. This, unlike the International Monetary Fund and Moody’s agency.

Similar to the report published by the International Monetary Fund on Israel, the legal reform is also mentioned in this report: “Widespread public protests against the legal reform proposed by the coalition continued in Israel, despite the freezing of the changes until the negotiations between the government and the opposition are completed. Our base scenario assumes that a certain agreement be reached, which will allow a recession of the increased political tensions,” the report states.

It is also written that “We may lower the rating to the extent that regional or local political risks escalate sharply, negatively affecting Israel’s economic, fiscal and balance of payments indicators.”

“We see that the presence in the government of parties with more hard-line policy agendas could complicate the dynamics around the West Bank,” the report said in reference to the composition of the government. with Iran or Syria. Nevertheless, risks remain: if the hostilities escalate into a wider conflict, several risks may be affected at the same time, including economic growth, the balance of payments and fiscal (budgetary) performance.”

The agency’s economists were convinced by a conversation the Prime Minister had with them recently, in which he assured them that reform would only pass with broad agreement: “We assume that a broad political consensus will finally be reached, and that growth will rise and stand at an annual average of 3.5% from 2024, supported by the strong performance of the diverse Israeli high-tech sector.” Another part reads: “Prime Minister Netanyahu temporarily suspended the implementation of the reform at the end of March.”

Prime Minister Binyamin Netanyahu and Finance Minister Bezalel Smotrich issued a statement in response to the positive credit rating (AA-) of the S&P rating agency: “Leaving Israel’s positive rating, in a challenging global economic period, is an expression of confidence in the correct economic policy we are leading. We will soon pass the The state budget in the Knesset to ensure the continuation of our efforts to strengthen the economy and fight the cost of living for the benefit of all Israeli citizens.”

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