S&P Gives Israel High Credit Rating – Corona Virus Be Dammed
Standard & Poor’s has given Israel an AA- credit rating. S&P is one of the most highly regarded credit rating agencies in the world.
The rating comes in spite of all of the problems that Israel’s economy has faced due to the Corona Virus shutdowns. Many entertainment businesses like bars and restaurants are failing because of mandatory closures. And Israel has been especially hurt because of its dependence on tourism.
This is significant because a nation’s credit ratings determine how much it will cost for it to borrow money. Think of your own personal credit rating and how that affects your ability to get a mortgage or a business loan.
Israel’s Prime Minister Benjamin Netanyahu was elated with the rating calling it, “another impressive vote of confidence in the economic policy that we have been leading.”
While S&P estimates that Israel’s economy will contract by a total of 5% in 2020, but rebound with 4.5% growth in 2021. The optimistic outlook for next year comes as Pfizer announced that its Covid-19 vaccine will soon be available worldwide.
This is in spite of the poor outlook that The International Monetary Fund has on Israel’s economy. It predicted contraction of 6.3% for Israel in 2020. And even the Bank of Israel predicted a 5.3% drop in Israel’s GDP.
The moment that the world will be able to get back to normal Israel’s economy shout explode. Not only will all of its local enterprises be able to get back to business as normal – movie theaters have been shuttered in Israel since March and bars and restaurants have been forced to close for long periods – but world tourism will get underway again.
Other firms were also high on Israel’s ability to make a comeback from the Corona recessions. Moody’s gave Israel a credit rating of A1 with stable outlook. Fitch’s most recent rating for Israel was A+. Each firm uses a different way of grading companies and businesses, but all of the above are quite good ratings.
“The decision by S&P to keep the State of Israel’s credit rating at AA-, with a stable outlook, is a great expression of trust in Israel’s economy and a mark of praise for the State of Israel. Israel is in a good position in relation to many countries in the world that are struggling with the coronavirus crisis,” Israel’s Finance Minister Yisrael Katz said in a statement.
