Photo Credit: Kobi Richter/TPS

The Standard and Poor’s (S&P) global credit rating agency announced Friday that it was keeping its assessment of Israel’s rating at a high -AA permanent.

S&P maintained the high credit rating despite the financial crisis the world is contending with in wake of the Coronavirus (COVID-19) pandemic and even though Israel’s economy is expected to contract by 5.5 percent in 2020 for the first time in over two decades, according to the company’s analysts.

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However, the Israeli economy is projected to recover and grow by more than 6% by 2021.

Representatives of the rating company emphasized in their announcement the core strengths of Israel’s credit rating, including a diverse economy, strong external accounts, robust macroeconomic data and a flexible monetary framework. The two major limitations of the rating remain the relatively high debt burden and the regional geopolitical risks.

This is the highest rating Israel has ever had, putting it on par with the Czech Republic and Qatar and among a relatively small list of fewer than 20 countries, and above others such as China and Japan.

The high rating enables the government to raise funds under better terms.

Israel has recently completed several rounds of bonds issuing to cover the defect expected to be generated by COVID-19 related expenditures.

The S&P analysts noted that despite the 19-month-long political instability, the Israeli authorities were quick to provide a coordinated response to contain the fallout from the pandemic.

Israeli Finance Minister Moshe Kahlon stated Friday that “until the Corona crisis erupted, the Israeli economy soared and reached the best state in its history. The good economic situation allowed us to manage an economic policy that led to reducing social gaps while strengthening the middle class.”

“I am pleased to see that the credit rating companies, despite the global corona crisis, continue to believe in the Israeli economy and its ability to return to financial strength,” he added.

Accountant General Roni Hezekiah added that “the ratification of Israel’s rating by another company during the crisis reflects the confidence of the rating agencies and international bodies in the Israeli economy and emphasizes the good conduct of the state in both the health and economic spheres.”

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