S&P keeps Israel rating
International credit-rating agency Standard & Poor’s announced on Friday it is maintaining its rating for the State of Israel at A+.
Standard & Poor’s sees Israel’s economy continuing to be robust in the face of shocks on the financial markets, thanks to its diversity, its balance of payments surplus and the flexibility still available in monetary policy.
The agency said it expects the Israeli government to continue managing public expenditure responsibly and to promote structural reforms. It said it does not believe that the security risks will materialize in the next two years.
Standard & Poor’s cited higher-than-projected tax receipts in 2015 that have continued into 2016, and that the coalition has agreed on a twoyear budget for 2017 and 2018, with a deficit target of 2.9 percent of GDP.
However, it said housing was a main challenge facing policy makers in Israel, and government measures introduced so far to boost supply will have limited impact in the short term.
Israel’s geopolitical situation has improved, and responsible fiscal policy will lead to a substantial reduction in the country’s debt burden, which could mean a rating upgrade, S&P said. On the other hand, a rise in the fiscal deficit and in government debt or a decline in international support would be liable to isolate the Israeli economy and lead to a downgrade of its rating, it said.