The Fitch agency has affirmed Israel's credit rating as "A+" giving the local economy a stable outlook despite the challenges posed by the coronavirus pandemic.
Follow Israel Hayom on Facebook and Twitter
The move echoes international credit rating agencies S&P and Moody's positions, 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% of GDP at the end of 2020, to remain high in 2021, at about 9% of GDP, and for the debt to GDP ratio to rise from 76% in 2020 to 80% in 2023.
Fitch further projected the deficit will narrow to 4.3% of GDP in 2022.
The agency noted that Israel's financing terms remain comfortable, among other things, due to the Bank of Israel's bond purchasing program that has resulted in nominal returns in 10-year government bonds of lower than 1% annually.
"The ratings are constrained by security risks, but Israel's credit profile has shown resilience to periodic conflicts," Fitch said.
"The Abraham Accords formalized the pre-existing relationships between Israel and some Arab countries and highlight a shared priority of containing Iran. It remains to be seen whether they lessen the geopolitical risks facing Israel. Economic benefits are likely to be limited given the modest size of their economies compared with existing trade partners."
Subscribe to Israel Hayom's daily newsletter and never miss our top stories!
