Fitch: Israel credit rating may rise if debt burden dips further

December 5, 2013 17:29

Israel's credit rating could be raised within two years if its debt burden and budget deficit keep falling, an analyst at Fitch Rating said after the diminishing prospect of war with Iran helped lead to an upgrade in its outlook.

An improvement in public finances and the government's commitment to deficit reduction, as well as a deal between world powers and Iran, led Fitch last week to upgrade its outlook for Israel to "positive" from "stable".

Fitch rates Israel's foreign currency as "A", a notch below Standard & Poor's rating of "A+".

Paul Gamble, the primary analyst for Israel at Fitch, said Fitch now has two years to either raise Israel's rating or move the outlook back to stable.

"One trigger for an upgrade is that you get a consistent narrowing of the deficit," he told Reuters on Thursday. "Public finances are on a positive trend and the deficit is going to come down. Things are on the right track but we're not there yet."

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