The international community trusts Israel’s responsible economic policies, Prime Minister Benjamin Netanyahu said Saturday, a day after Standard & Poor’s maintained the country’s “A+” rating with a stable outlook.
“The credit rating expresses the international community’s trust in the responsible and measured management of the Israeli economy over recent years,” the prime minister said.
The budget the cabinet approved last week, which is meant to go to a final Knesset vote in November, continues that policy and is meant to continue economic growth and maintain Israel’s credit score, he added.
Finance Minister Moshe Kahlon raised the deficit for 2015-2016 to 2.9 percent from the 2.5% planned for 2015 and 2% for 2016; the Bank of Israel expects this to lead to the first increase in Israel’s debt burden since the global financial crisis took its toll in 2009.
S&P estimated that, in reality, the 2015 deficit will be 2.8% and warned that if the deficit goes beyond its 2.9% goal, it will lower Israel’s credit rating, Globes reported. This could happen if the defense budget ends up being higher than the NIS 55.3 billion listed in the budget, something Netanyahu and Defense Minister Moshe Ya’alon said would likely happen.
Though regional instability also could lower Israel’s credit rating, S&P said the world powers’ nuclear deal with Iran did not impact it.