Israeli Prime Minister Benjamin Netanyahu proudly announced to his cabinet on Sunday at their weekly meeting that the temporary AA- rating Standard and Poors gave Israel in August was made permanent.
“You have certainly noticed another achievement for the Israeli economy,” he told the cabinet. “This is a very strong expression of confidence in the economic policy that we have led in recent years, which has led the Israeli economy to unprecedented growth.”
When upgrading Israel’s rating to its historic high, S&P cited Israel’s stable growth and improved fiscal position in light of the sharp reduction in net government debt.
“This is based on our belief that, absent global trade shocks, Israel’s economic growth outlook will remain solid and allow the government to accommodate pressures coming from social and infrastructure spending, as well as a potential moderate escalation of security risks,” S&P said at the time. “Israel has demonstrated sound economic performance since the global financial crisis, with a current GDP of about $140 billion (or 50 percent) larger than in 2010, the current account in a sustainable surplus, and unemployment at historical lows.”
The temporary status was due to Israel’s “high exposure to external and domestic security risks weigh on the country’s creditworthiness.”