S&P retains negative outlook for Israel rating

The credit rating agency notes the strengths of Israel’s economy, but sees current geopolitical risks as decisive.

International credit rating agency S&P announced on Friday that it was leaving its sovereign rating for Israel unchanged, at A, with a negative outlook. The neutral announcement comes after two consecutive rating downgrades in its announcements in April and October 2024.

The agency states that the decision to retain the negative outlook, implying that a further downgrade is possible, stems from geopolitical risks, and the assessment that the conflict between Israel and Hamas and other organizations supported by Iran is liable to weaken the Israel economy, public finances, and the balance of payments significantly.

S&P makes positive mention of the strengths of Israel’s economy, citing a rich and diversified economy, and the advantages of monetary flexibility and high savings, but says that the geopolitical and security risks are constraints on the country’s rating.

S&P’s decision to confirm Israel’s current rating is in line with the view taken by rival rating agencies Moody’s and Fitch, which in their announcements in March also retained negative outlooks for the rating, pending developments in the security and diplomatic spheres.

Published by Globes, Israel business news – en.globes.co.il – on May 11, 2025.