S&P Maintains Israel's Stable Outlook despite Security Risks

Global ratings agency Standard & Poor's  (S&P) affirmed on Friday  its long-term sovereign credit rating of Israel at “AA-/A-1+” , while maintaining its outlook at “stable”.

Standard & Poor's said that although security and political risks have risen sharply in the past few days, the combination of an extremely effective and rapid vaccination campaign against the pandemic, the strong performance of the technology sector and increased gas exports, is still supposed to support GDP growth by 5% in 2021.

The launch of the vaccine and the third lockdown helped Israel emerge from the pandemic shutdowns and reopen its economy, even as it remains mired in political deadlock after a fourth inconclusive election.

The Israeli Health Minister said on March 25 that more than half of its residents had received COVID-19 doses.

"The internal political uncertainty has been consistently high over the past two years due to the frequent elections, but this also has not significantly affected the economy so far," S&P said.

The rating agency said that the pressure on Israel's ratings could increase if the security and political risks associated with the current escalation are prolonged, affecting the country's economic, financial and balance of payments metrics.

According to the IDF Spokesperson Avichay Adraee, the country has been hit with 3000 rockets from the Gaza Strip, and the Israeli iron dome has not been able to intercept all of rockets.