S&P upgrades Israel's rating outlook

Moshe Kahlon  photo: Globes TV

The change from neutral to positive means that an upgrade in Israel's credit rating is possible in 6-24 months.

International credit rating agency S&P is changing its rating outlook for Israel from neutral to positive. The change means that an upgrade in Israel's credit rating is possible in 6-24 months. The rating could also be left unchanged if there is a significant downturn in one of the main criteria on which the rating is based, such as political stability.

S&P says that further progress in reducing the public debt as a proportion of GDP is likely to lead in an upgrade of Israel's credit rating. Alternatively, a worsening of budget performance, economic growth, or the balance of payments, and a substantial increase in security risk could have a negative impact on Israel's credit rating.

Responding to the change in Israel's rating outlook, Minister of Finance Moshe Kahlon said, "The confidence in the Israeli economy repeatedly expressed by important economic agencies in the world are a proof that the policy of investing in young couples, narrowing social gaps, compassion for the disadvantaged, and social sensitivity are the right way to make the economy grow. We will continue leading the Israeli economy with responsibility and determination."

Ministry of Finance Accountant General Rony Hizkiyahu said, "The improved rating outlook reflects strong fiscal performance, and emphasizes the importance of continuing a policy of encouraging growth and lowering the ratio of debt to GDP."

The upgrading of the rating outlook is also likely to affect Israel's credit rating by the other two major international credit rating agencies: Moody's and Fitch.

S&P's current credit rating for Israel is A+, raised from A in September 2011. Since that the time, the government has managed to lower the ratio of public debt to GDP, the main criteria for a country's credit rating, from 69% to 64.6% at the end of 2016.

Published by Globes [online], Israel Business News - www.globes-online.com - on August 6, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Moshe Kahlon  photo: Globes TV
Moshe Kahlon photo: Globes TV
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