Moody's: Netanyahu's decisive win 'credit positive' for Israel's credit

Part of the good news, as far as Moody's is concerned, is fact that a right-wing government would be more stable than the previous one.

By NIV ELIS
Shekel money bills (photo credit: REUTERS)
Shekel money bills
(photo credit: REUTERS)
Moody’s says Netanyahu’s decisive win ‘credit positive’ • By NIV ELIS Prime Minister Benjamin Netanyahu’s decisive elec - toral victory is a good sign for Israel’s credit, accord - ing to credit-ratings agency Moody’s, which dubbed the outcome “credit positive” on Monday.
The agency said it expect - ed a budget to be presented within 100 days and that it would keep to fiscal rules.
“Although the precise com - promises within the new budget remain to be seen, because the probable choice for finance minister will be someone new to the post, we expect the government’s fis - cal rules to contain spend - ing growth and keep credit metrics for Israel (A1 stable) on their well-established improving trend a credit pos - itive,” the company wrote in a report.
That the budget will be presented well into the fiscal year also indicates that a two- year budget is likely, mean - ing new budget negotiations won’t be on the table until the end of 2016.
But part of the good news, as far as Moody’s is con - cerned, is that a right-wing government would be more stable than the previous one, which fell apart in less than two years.
“With a dominant 67-seat majority likely, we expect the new administration will be more long-lived than the last, providing time to coalesce public opinion around key issues facing the country,” the report said. The coalition “would likely be inherently more stable than a coalition led by the center-left Zionist Union, which would struggle to put together a majority.”
The report does not signal a change in Israel’s credit rating, which influences its borrowing costs, but simply shows how the elections will likely affect its fiscal situation.
When elections were called in December, Moody’s said the government instability and period of policy uncertainty were “credit negative.”