S&P : Israel to get record rating

Vardina Hilloo

How fare is the Israel steady economy outlook,
has confirm recently.

Standard & Poor's Ratings Services (S&P) raised
its long-term foreign currency sovereign credit
ratings on the State of Israel to 'A+/A-1' from
'A/A-1'. At the same time, S&P affirmed the local
currency ratings at 'AA-/A-1+'.

Also, S&P's outlook is stable, and the transfer
and convertibility (T&C) assessment remains at 'AA'.
S&P mentioned that their ratings on Israel are
supported by their view of its "prosperous and
resilient economy, strong institutions, ongoing
fiscal consolidation, and robust external performance.

"The ratings are also constrained by significant
geopolitical risks, partially offset by U.S. support,
and its still-sizeable public-sector debt burden.
Israel is on a credible path toward continued government
debt burden reduction and stronger external indicators,
having weathered the global financial crisis well,
according to S&P  which also noted that Israel's
external position is sound, as a result of consistent
current account surpluses since 2003,
The production of natural gas by the middle of the
decade is likely to further increase the economy's
efficiency as well as strengthen its fiscal and
external positions, estimated S&P.

The stable outlook reflects S&P's opinion that Israel's
popular consensus about containing public debt will
remain intact despite social protests. S&P noted that
"despite rapid appreciation in housing prices, we do
not consider the sovereign to be exposed to significant
contingent liabilities from the financial system.
S&P :, the banking sector appears to be tightly regulated,
resident banks seem to pursue relatively conservative
business models, and Israeli banks and households are
also fairly well capitalized by international standards.

September 2012