S&P Global Ratings has kept Israel’s sovereign credit rating at ‘A’ with a stable outlook. Despite months of security and economic upheaval, the agency sees no reason to change its view of the country’s credit risk.
Investors are worried about political paralysis © Mena Today
S&P Global Ratings has kept Israel’s sovereign credit rating at ‘A’ with a stable outlook. Despite months of security and economic upheaval, the agency sees no reason to change its view of the country’s credit risk.
The decision comes at a sensitive moment. Israel’s election has ended in deadlock, investors are worried about political paralysis, and the shekel and Tel Aviv stocks have been volatile since the vote.
S&P last reaffirmed the rating in May. At the time, it said ceasefire agreements should ease immediate security risks and that, barring another major military escalation, the hit to the economy should be limited.
But the agency also issued a clear warning: a significant deterioration in economic performance or public finances, possibly triggered by renewed fighting, could lead to a downgrade.
Strong growth, heavy debt
S&P’s May forecasts painted a mixed picture. The agency expected the economy to grow 5.9% in 2027, a strong rebound.
But it also flagged lasting pressure on the budget, with the general government deficit seen at 6% of GDP in 2026 and net government debt projected to reach 68% of GDP by 2029.
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