Israel’s Sovereign Credit Rating Slides Down to A+ on Geopolitical, Fiscal Concerns

In recent news, the international rating agency S&P has lowered Israel’s sovereign credit rating in foreign currency from AA- to A+. This reduction was not unexpected, as Moody’s had already downgraded Israel’s rating and Fitch had changed its outlook to negative.

S&P cited two main reasons for the downgrade: a significant deterioration in the geopolitical situation and an increase in the state budget deficit. The agency projects a deficit of 8%, which is higher than the initial 6.6% budgeted. Additionally, S&P forecasts that Israel’s public debt to GDP ratio will reach 66% by 2026.

These developments highlight the challenges facing Israel’s economy and the need for prudent fiscal management to stabilize its credit rating and address its growing debt levels. It is crucial for the government to implement effective measures to improve its fiscal position and boost economic growth in order to regain the confidence of international investors and rating agencies.