Fitch Affirms Israel at 'A+'; Outlook Stable

Fitch Ratings affirmed Israel's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'A+' with a Stable Outlook:

• Israel's 'A+' rating balances a diversified, resilient and high value-added economy and strong external finances against a relatively high government debt/GDP ratio, ongoing security risks and a record of unstable governments that has hindered policymaking.
• Fitch believes [judiciary] changes may have a negative impact on Israel's credit metrics if the weakening of institutional checks leads to worse policy outcomes or sustained negative investor sentiment or weakens governance indicators.
• Fitch project inflation to continue to slow until the end of the year as import prices drop and endogenous inflation slows with a moderation of consumption and investment.
• Beyond the current budgets, Fitch project a further widening of the budget deficit given spending pressures and an aversion to tax increases in the ruling coalition.

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