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Moody's: Israel Fully Recovered from Recession

Moody's cites high GDP growth, rising exports, low inflation, and low interest rates among the factors contributing to Israel's economic recovery.
First Publish: 3/7/2005, 1:42 PM / Last Update: 3/7/2005, 3:37 PM

High growth in GDP of 4.3% in 2004 is one of the factors cited by Moody's Investors Service, supporting its conclusion that Israel has completely recovered from the recession that plagued the economy since the start of the Oslo War in September 2000.

Moody's expects Israel to sustain high economic growth in 2005, but warns that a global economic downturn will put a brake on Israel's economic expansion. Political uncertainty in Israel may delay or hinder attempts at reform and structural changes in banking, electricity, real estate and the public sector.

Moody's left Israel's credit rating unchanged at A2 (equivalent to A-) and the country's credit outlook remained fixed at "stable". Had it not been for Israel's large external debt, however, the company might have upgraded Israel's credit rating
to A3.

Overall, Moody's cited a number of positive factors contributing to today's climate of economic growth: rising GDP and business product (6%), exports (15%), a current account surplus, low inflation, and low short term interest rates.