The American rating agency Standard and Poor’s raised today Israel’s credit rating from A/A-1 to A+/ A-1 while keeping its economic outlook at ” stable”.
Standard and Poor’s also reported that Israel’s currency rating will remain at AA-/A-1+.
This decision to raise Israel’s credit rating was based on Standard and Poor’s analysis that Israel’s policy in recent years was sound which was accompanied with strong economic growth. The rating agency also stated that Israel managed to weather the global economic crisis; Israel’s ongoing trend of reducing its government debt by paying off its loans and keeping the Israeli budget deficit within limits also helped keep Israel stable. I have already addressed in the past that Israel’s economy and suggested that its external debt doesn’t warrant much concern as is the case in many other countries that are currently facing a debt crisis.
While the GDP growth rate in Europe in the second quarter was only 0.2%, Israel’s GDP growth rate in Q2 2011 reached 3.3% (in annual terms).
S&P stated that despite the rise in housing prices in recent years, it doesn’t consider this situation to develop into a national liability from the financial system.
On the other hand, S&P also addressed its concerns over the geopolitical stability of Israel mainly with its neighboring countries and Palestinians.
Lior Cohen, M.A. economist and blogger at IBR and Trading NRG.
For further reading:
- S&P kept Israel’s credit rating unchanged at A
- Moody’s left Israel’s rating unchanged but downgraded its Banks
