S&P Global Ratings has reaffirmed Israel’s sovereign credit ratings at “A/A-1” for both long- and short-term foreign and local currency debt. However, the agency cautioned that an extended or escalating military conflict could weigh heavily on the country's economic resilience, fiscal health, and external balances.
The Bank of Israel projects slightly higher growth at 3.5%, and anticipates a drop in the budget deficit to 4.2% of GDP, down from 6.9% last year © Mena Todzay
S&P Global Ratings has reaffirmed Israel’s sovereign credit ratings at “A/A-1” for both long- and short-term foreign and local currency debt. However, the agency cautioned that an extended or escalating military conflict could weigh heavily on the country's economic resilience, fiscal health, and external balances.
Despite the uncertainty, S&P forecasts a moderate rebound in Israel's economy, with GDP growth projected at 3.3% in 2025. This recovery is expected to be driven by a resurgence in private consumption and capital investment.
Potential risks from increased U.S. tariffs are expected to have a limited impact, as most Israeli exports to the United States are services — especially in information and communication technologies — which are typically not subject to trade duties.
The Bank of Israel projects slightly higher growth at 3.5%, and anticipates a drop in the budget deficit to 4.2% of GDP, down from 6.9% last year.
This would ease pressure on public finances and support the country’s credit profile. Still, the central bank has warned that geopolitical tensions and volatility in global markets continue to pose significant risks, with Israel’s risk premium having widened noticeably.
Reflecting this caution, S&P maintained Israel’s outlook at “negative,” signaling that a downgrade remains possible if the security situation or economic metrics deteriorate further.
Israeli Prime Minister Benjamin Netanyahu restated his rejection of Donald Trump's latest Gaza plan in televised remarks to his right-wing government on Sunday, even as Israel's military has effectively halted attacks in the territory under pressure from the U.S. President.
US Senators Jeanne Shaheen (D-NH) and James Lankford (R-OK) introduced legislation Thursday that would authorize up to $1.2 billion in security assistance to Lebanon over five years, with part of the funding conditioned on Beirut's progress toward a state monopoly on arms and the disarmament of Hezbollah.
Lebanon and Israel have agreed a shortlist of countries that could send troops to verify the disarmament of Hezbollah under a U.S.-brokered agreement, a Lebanese official said on Friday, with the United States due to pick countries from the list.
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