The S&P credit rating company announced that it has upgraded Israel's credit rating from A + to AA -, the highest rating Israel has ever won.
Raising the rating is a very significant achievement for the Israeli economy and expresses confidence in the ability of the economy to grow and the government's ability to maintain a responsible fiscal policy. On the practical level, it will allow the government to raise funds under better conditions.
Raising the rating to the level of AA Minus puts Israel on a narrow list
And places it above countries like China, Japan and Chile. To date, there are 17 countries that share Israel's new ranking.
The S&P credit rating company notes in its announcement that the increase in the rating was due to an improvement in Israel's fiscal policy alongside growth and high tax revenues, which led to a significant decline in the ratio of net government debt to GDP in recent years.
The rating agency estimates that the Israeli economy will grow by an average of 3.3% in the years 2021-2018, with growth stemming from private consumption, continued investment by corporations, and strong performance in the export of services.
The rating agency notes that a weakening of economic or fiscal performance, as well as a significant increase in security risks, could harm Israel's credit rating, while the likelihood of raising the rating in light of further improvement in performance is currently low. The report also notes that the likelihood of a significant fiscal weakening has diminished in light of the strong economic growth that is supposed to compensate for some of the tax cuts.
The new rating reflects the confidence of the international institutions in the economic policy of the government and in the monetary policy introduced by the Bank of Israel, "the CEO of Israel Bank, Dr. Karnit Flug responded to the decision to raise Israel's rating to AA- the highest level ever.
According to Flug, the decision constitutes, among other things, an expression of confidence in the Bank of Israel's policy that "contributed to the growth of the economy and to the ability of the government to meet its future commitments." According to Flug, "the decision is further proof of the importance of the continued reduction of the debt-to-GDP ratio and the contribution of the reduction in the debt burden to the strength of the Israeli economy."