Money Shekels bills 521.
(photo credit: Courtesy)
Moody’s Investment Services has reiterated its A1 government-debt rating with a
“stable” outlook for Israel in its annual credit report. The rating balances the
country’s high levels of economic, institutional and financial strength, as well
as its geopolitical challenges, the report said.
The Finance Ministry
hopes Moody’s will upgrade Israel’s debt rating by the end of the year or in
early 2012. For now, Moody’s is making no change in its debt rating, nor hinting
at any change in the foreseeable future.
“The Israeli economy is
resilient and dynamic, and the macroeconomic policy framework is coherent,”
Moody’s vice president Anthony Thomas said in the report. “We are less concerned
about Israel’s fiscal well-being than we are about the potentially negative
consequences for investment and territorial security,” he said, citing Israel’s
geopolitical challenges and its good track record in coping with
Moody’s said the government debt figures had been relatively
unaffected by the global crisis and are already improving. The debt-to-GDP ratio
fell slightly below its precrisis level by the end of 2010.
economic model based on hitech exports was performing well and underpins
favorable medium-term growth prospects, the report said. The new Bank of Israel
Law and additional limits on fiscal spending and deficits strengthen already
robust institutions, it said.
However, Moody’s warned that unrest across
the Middle East highlights the regions geopolitical risks.
unrest was motivated by internal political discontent, it could potentially have
fiscal repercussions for Israel if defense spending has to be increased, the
The A1 debt rating was “further confirmation of the success
of the government’s economic policy,” Finance Minister Yuval Steinitz said
Tuesday in a press statement.Bloomberg contributed to this report.