JERUSALEM, April 19 (Xinhua) -- Credit rating agency Standard & Poor's (S&P) has downgraded the Israeli government's credit ratings to A+ from AA-, with the outlook remaining "negative," the Israeli Finance Ministry said in a statement on Friday.
Responding to the downgrading, the country's General Accountant Yali Rothenberg said Israel must act with fiscal responsibility to ensure the economy's long-term growth and a decrease in the debt-to-GDP ratio.
S&P analysts explained that the recent increase in confrontation with Iran heightens already elevated geopolitical risks for Israel.
The negative outlook reflects the risk that the Israeli-Palestinian conflict and the confrontation with Hezbollah could "escalate or affect Israel's economic, fiscal, and balance-of-payments parameters more significantly than we currently expect," said the agency.
Meanwhile, the agency predicts that Israel's general government deficit will widen to 8 percent of gross domestic product (GDP) this year, up from 6.7 percent of GDP last year and 1.8 percent in 2022, primarily driven by increased defense expenditures.
The agency also expects Israel's growth to be 0.5 percent in 2024, following 2 percent growth in 2023, including a significant rebound in growth in the first quarter of 2024 "given the past resilience and arguably higher capacity of the Israeli economy to adapt to the impact of military conflicts." ■
