Fitch Ratings are reiterated Israel's sovereign debt rating at A, with a "Stable" outlook. The rating is for Israel's long-term foreign currency issuer default rating. Israel's domestic bond rating was maintained at A+, also with a "Stable" outlook. Fitch follows Moody's Investors Service and S&P, both of which recently reiterated their credit ratings for Israel.
Fitch said that Israel is one of only four A-rated countries that will emerge from the recession in 2009. It said that the Israeli economy survived the global economic crisis in better shape than many similar economies. Israel's recession was easier than in similar European and Asian countries, and it was most felt in lower tax revenues.
Fitch partly attributed Israel's good performance to the Bank of Israel's aggressive monetary policy, including its exchange rate policy and increasing its foreign currency reserves. Additional factors were a stable, problem-free banking system, and the lack of bubbles in the domestic market. Israel's high-tech and services industries demonstrated stability in the face of falling global demand caused by the economic crisis, and those industries' exports led to an unprecedented current accounts surplus in 2009.
Fitch warned that Israel's high debt-to-GDP ratio was still the main factor limiting the country's sovereign rating, but said that fiscal anchors, such as the spending cap and deficit target, had slashed the ratio from 100% at the end of 2003 to 78% at the end of 2008. While still high, there are countries with a higher debt-to-GDP ratio.
Published by Globes [online], Israel business news - www.globes-online.com - on November 8, 2009
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