International credit rating agency Moody's, the most conservative of the three major international rating agencies, today confirmed Israel's A1 rating with a stable outlook. In the announcement attached to its rating, Moody's economists explained that the rating was supported by economic flexibility and the great effectiveness of the government, which is constantly working to improve Israel's debt and financing figures. The agency also states that were it not for Israel's geopolitical risks, its credit rating would be higher.
Moody's describes Israel's economy as very strong, with growth supported primarily by high-tech exports. Writing about this sector, Moody's economists say that it rests on a highly educated population and high R&D expenditure. Israel's debt is low by international standards, and Israel dealt effectively with the crisis that engulfed the world's economies.
The weak points listed by Moody's include political instability and security risks that grow when the situation in Syria becomes even more unstable. Moody's also cites threats by Iran, which continues to fuel global terrorism, especially against Israel.
Concerning the plan for natural gas development in Israel, Moody's says that political disputes on the issue are liable to drive away potential investors in natural resources.
Moody's forecasts 2.9% economic growth and 0.6% inflation in 2016, compared with 2.5% growth and minus 1% inflation in 2015.
Published by Globes [online], Israel business news - www.globes-online.com - on March 31, 2016
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