(Israel Hayom via JNS) The Fitch agency has affirmed Israel’s “A+” credit rating, giving the local economy a stable outlook despite the challenges posed by the coronavirus pandemic. The move echoes the positions of international credit rating agencies S&P and Moody’s, which have also given Israel positive forecasts. Fitch cited Israel’s strong external finances, diversified, high-value-added economy and solid institutional strength as the basis for its projection, but warned of the ongoing political uncertainty and security risks as potential undermining factors.

Fitch said it expects the budget deficit, which reached 11.7 percent of GDP at the end of 2020, to remain high in 2021, at about 9 percent of GDP, and for the debt to GDP ratio to rise from 76 percent in 2020 to 80 percent in 2023. Fitch further projected the deficit will narrow to 4.3 percent of GDP in 2022.

The agency noted that Israel’s financing terms remain comfortable, due to among other things the Bank of Israel’s bond purchasing program that has resulted in nominal returns in 10-year government bonds of lower than 1 percent annually.

Main Photo: The Fitch credit ratings agency office in London | File photo: Reuters