Finance Minister Yuval Steinitz is slated to meet next week with representatives of the international credit rating firm Standard & Poor's, which is sending a delegation to Israel leading up to the preparation of their annual report on Israel's economy.
Steinitz intends to tell the S&P economists that Israel's economy is very strong.
Steinitz will also explain the government's recent decision to double the country's deficit, from 1.5 percent to 3% in 2013, emphasizing that Israel has will continue to preserve its fiscal strength and bank stability in its financial sector. Steinitz will also promise that the government will not allow an increase in its expenses nor a breach of its budgetary framework.
The S&P economists will arrive in Israel on Sunday. Economists from the two other major international credit rating companies, Moody's and Fitch, are also slated to visit Israel in the near future to evaluate the Israeli economy. All of the companies will issue initial reports on the Israeli economy at the end of their visits and final reports soon thereafter.
Many predict that these visits will have no effect on Israel's current credit rating, in contrast to many other OECD countries that have recently had their credit ratings reduced, including the U.S.
Despite its increased deficit, Israel will maintain its rating, experts say. However, the companies are likely to include a series of recommendations for debt reduction in their reports, including budget cuts and taxes the government should impose over the next year or two. Economists are likely to recommend, among other things, an increase in both the value added tax and income tax in order to rapidly close the deficit.
S&P's increased Israel's credit rating from A to A+ in September 2011 while Fitch recently verified it's A rating of Israel in April.
The S&P economists will also meet with Bank of Israel Governor Stanley Fischer, Bank of Israel Deputy Governor Dr. Karnit Flug and Bank of Israel Research Division Director Nathan Zussman to discuss their opposition to increasing the deficit.
In the past, the economists have met with Treasury Director-General Doron Cohen and Budgets Department Director Gal Hershkovitz as well.