Standard & Poor, one of the world's leading financial and analytical credit rating agencies, retained Israel's credit rating, saying that the country's fiscal consolidation remains on track. Israel's 'A+' rating and its stable outlook was affirmed.
Standard & Poor announcement stressed that the decision to leave the credit rating unchanged was based on an improvement in Israel's fiscal framework, steady economic growth and lowering of the ration of debt to gross domestic product.
The decision also reflects the fact that Israel's economy is diverse and flourishing, the positive effect of the natural gas production on Israel's external account, and Israel's monetary flexibility.
The company noted that despite the improvement, the fiscal framework and geo-political risks were cited as reasons for not raising the rating. The fiscal consolidation is underpinned by extra one-off revenues in 2013 and upward revisions to GDP due to new calculation methodologies.
Consequently, S&P expects a modest decline in the gross general government debt ratio. The stable outlook reflects the view that the government will continue to consolidate the public finances and that the effect of security risks on the Israeli economy will be contained, S&P said.