Standard & Poor's (S&P) on Friday affirmed Israel's credit rating at 'A/A-1', maintaining the country's standing despite ongoing geopolitical and domestic challenges.
The rating agency also stated that the outlook for Israel remains negative, citing geopolitical and security risks and noting that Israel's domestic political landscape remains difficult to predict.
Economists at the company stated in their new report that there has been no significant change in the Israeli economy since the previous report, and that the Israeli economy demonstrates stability and resilience despite the ongoing war, which has lasted 19 months.
However, S&P warned that an expansion of the war or a significant resumption of fighting in the Gaza Strip or other fronts could harm the Israeli economy, significantly increase defense and other expenditures, disrupt economic activity—particularly if a large-scale reservist mobilization is carried out—lead to a wider budget deficit, and increase government debt, with rising interest rates on that debt.
The economists further noted that a possible deterioration in the geopolitical situation in the Middle East in general, and in Israel in particular, could lead to further downgrades of Israel’s economic rating in the future.
However, they said, avoiding an escalation in the security situation, de-escalating tensions, and reaching a permanent ceasefire would help restore Israel’s credit rating from negative to stable, and potentially lead to a rating upgrade in the future, after its first downgrade in 2024.
In late March, Fitch Ratings announced that Israel’s long-term sovereign credit rating will remain at A with a negative outlook, maintaining its stance following a downgrade last August.
A week prior, credit ratings agency Moody’s projected that Israel’s credit rating will remain at its current level through 2025.
(Israel National News' North American desk is keeping you updated until the start of Shabbat in New York. The time posted automatically on all Israel National News articles, however, is Israeli time.)