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Israeli government praises S&P for maintaining the country’s credit ranking

Israeli Prime Minister Benjamin Netanyahu and Minister of Finance Bezalel Smotrich seen during a press conference at the Prime Minister's office in Jerusalem, Jan. 25, 2023. (Photo: Yonatan Sindel/Flash90)

Israeli Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich praised the global credit agency Standard & Poor’s (S&P) decision to maintain the Jewish state’s high AA credit ranking, despite warnings of negative impact from the government’s controversial judicial reform plans.

“The preservation of Israel’s positive credit rating during a time of global economic challenges is a vote of confidence in our current economic policies,” wrote Netanyahu and Smotrich in a joint statement. 

The U.S. credit agency on Friday noted the Jewish state’s “resilient economy, strong balance of payments, and a moderate level of public debt.” 

However, the New York-based credit company also articulated concerns about “persistent domestic and regional political and security risks,” which include the judicial overhaul plan and periodic rounds of conflict with Gaza-based terrorist organizations Hamas and Palestinian Islamic Jihad. 

Israel’s economy is generally considered robust and has even thrived, despite Israel’s difficult and complex geopolitical security situation.

However, in April, the credit agency Moody's decided to downgrade Israel’s credit outlook due to concerns that the judicial reforms would weaken Israel’s institutions including an independent judiciary. 

“While mass protests have led the government to pause the legislation and seek dialogue with the opposition, the manner in which the government has attempted to implement a wide-ranging reform without seeking broad consensus points to a weakening of institutional strength and policy predictability,” stated Moody's in its conclusion. 

Following the Moody's credit setback, the Netanyahu government made attempts to prevent S&P from downgrading Israel’s credit outlook. 

While S&P decided this time to maintain Israel’s credit rating, it warned that the Israeli economy faces real dangers. 

"Despite the Abraham Accords and the signing of the maritime border agreement with Lebanon, an escalation of hostilities with organizations surrounding Israel is certainly a real possibility." 

The All Israel News Staff is a team of journalists in Israel.

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