The most important credit rating company S&P confirms Israel rating at - AA minus


by Ifi Reporter Category:Capital Market Nov 12, 2022

The international credit rating company S&P on Saturday reaffirmed the credit rating of the State of Israel at AA- level with a "stable" rating outlook.
The company's forecast for 2022 predicts growth at a rate of 6%, similar to the estimates of the Bank of Israel. However, against the background of the expected slowdown in Israel's trade partners, mainly the United States and Europe, the rating company predicts that growth for 2023 will be only 2% - lower than previous estimates by the Bank of Israel. It should be noted that this growth rate exceeds forecasts in most developed countries.

The company anticipates that the growth rate in the long term will stabilize at 3.5%, similar to past performance, and notes that alongside the strengths of the economy, there are challenges regarding low productivity in traditional areas of the economy, and a relatively low participation rate in the labor force in part of the Israeli population.
Against the background of the figures of the significant budget surplus so far in 2022 resulting from the unexpected increase in tax revenues, the company expects that on an annual level the budget will be balanced, a significant improvement compared to previous years.
The company predicts that in light of the increase in inflation and the tightening of monetary policy, pressure will be created on the new government that will be established to act in order to ease the cost of living, and the deficit will be 2% of the GDP in the next three years. According to the company's forecasts, the debt-net GDP ratio will return to its level in 2019 (about 58% of GDP) in 2024.
The company positively notes the agreements signed in recent years with the countries of the region, led by the Abraham agreements, but at the same time mentions that security and geopolitical risks limit the credit rating.
Minister of Finance, Avigdor Lieberman: "Another confirmation of the credit rating by S&P with a stable rating forecast is the result of a responsible fiscal policy and emphasizes the strength of the Israeli economy."
Accountant General, at the Ministry of Finance, Yehli Rotenberg: "The continued stability of the high credit rating is evidence of the strength of the Israeli economy, even in days of global uncertainty and inflation. Maintaining consistency and fiscal responsibility while continuing the downward trend in the debt-to-GDP ratio supports the country's rating. The Accountant General's Division will continue to take in a responsible policy of managing the government debt".



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