© Reuters
| Sonia Gorodisky, Israel Hayom |
Flashing warning sign from S&P: “Without adjustments, fiscal room for maneuver could decrease.”
Israel’s credit rating may drop if the war expands to additional fronts.
If the government makes the necessary budgetary changes to offset the high expenses, Israel should be able to withstand the economic consequences of the war, the world news agency Reuters reported on Sunday.
Let’s recall that in October the rating agency S&P confirmed Israel’s rating at the level of AA-, but lowered the rating forecast for Israel from “stable” to “negative”.
The agency stated, among other things, that an outbreak of a multi-system war could lead to a drop in the actual rating in the next rating announcement, which is expected in about six months:
“The negative forecast on the rating implies that we currently see at least a one in three chance of a downgrade during the next one to two years,”
Maxim Rybnikov, who is responsible for Israel’s credit rating on behalf of the S&P rating agency, told Reuters.
according to him,
“If Israel’s security and geopolitical risks increase due to the escalation of the conflict – a direct confrontation with Hezbollah in Lebanon or Iran – this could lead to a downgrade. “In addition, the rating could drop if the impact of the conflict on Israel’s economic growth, fiscal position and balance of payments turns out to be more significant than we currently speculated,”
Rybnikov said.
According to him, S&P predicts that Israel’s economy will grow by only 0.5% in 2024 and will have a cumulative budget deficit of 10.5% of GDP…
Read the full article on the Israel Today website