Finance Minister Moshe Kahlon. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
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Minister of Finance Moshe Kahlon responded to the announcement that Israel had received its highest ever credit rating from Standard & Poor’s credit agency, in an interview with Army radio Sunday morning.
“If the headlines were reversed, they would hang me in the city square. For three and a half years they have been criticizing my actions, but today I’m happy,” Kahlon said.
Kahlon promised Israel’s credit rating would continue to increase. “Although now it is double-A minus, this minus will disappear in a year,” he said.
The upgrade in the S&P rating grade, which gauges the ability of governments to meet their financial obligations in full and on time, joins a similar rating given by Moody’s last month.
“These decisions reflect the strength of the Israeli economy and the correct and responsible economic policy that we are leading on behalf of Israel’s citizens,” Prime Minister Benjamin Netanyahu said Saturday night.
Finance Minister Moshe Kahlon said the credit rating upgrade will save the country “billions of shekels” that will be passed on to the Health, Education and Welfare ministries.
The AA- rating from S&P is the highest rating Israel has ever received from the credit agency. The highest rating is AAA.
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At the same time, however, the agency lowered the country’s economic outlook from “positive” to “stable.”
The agency explained its AA rating saying that although public debt remains relatively high, “we now think that fiscal slippages leading to a significant reversal of the debt path are unlikely. This is based on our belief that, absent global trade shocks, Israel’s economic growth outlook will remain solid and allow the government to accommodate pressures coming from social and infrastructure spending, as well as a potential moderate escalation of security risks.
“Israel has demonstrated sound economic performance since the global financial crisis, with a current GDP of about $140 billion (or 50%) larger than in 2010, the current account in a sustainable surplus, and unemployment at historical lows,” the agency noted.
The agency forecast that the economy would grow at a rate of 3.3% until 2021. It also pointed out that despite domestic political volatility, the coalition approved a two-year budget for 2017-2018 and also the 2019 budget.
The Jerusalem Post Staff contributed to this report.
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