The international rating agency S&P recently announced that Israel’s sovereign credit rating in foreign currency has been downgraded from AA- to A+. Despite this reduction, the agency has maintained a negative forecast, indicating the possibility of a further downgrade in the near future.
It was not unexpected for Israel’s rating to decrease, as it had previously been higher than ratings given by other agencies. Moody’s had already downgraded Israel’s rating, while Fitch had changed its outlook to negative.
The main reasons cited by S&P for the rating downgrade include a worsening geopolitical situation and an increase in the state budget deficit. The agency is projecting a deficit of 8%, higher than the budgeted 6.6%. Additionally, S&P forecasts that Israel’s public debt-to-GDP ratio will reach 66% by 2026.