Israel's credit rating remained unchanged at the relatively high level of AA-, international credit rating agency Standard & Poor's said in its latest report on the Jewish state.
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The company noted Israel's economic diversity, strong foreign assets and optimal debt structure, as well as ability to withstand internal and external impacts, such as the Russia-Ukraine war. Nevertheless, it raised concern over the "political and security risks [that] have re-emerged" as a result of the coalition losing its majority in the Knesset and the recent terror wave.
The S&P report expects Israel's economy to expand by 5.5% this year, after having already grown by 8.2% in 2021 – a strong increase, especially against the backdrop of the coronavirus pandemic. In 2020, Israel's economy contracted by 2.2.%.
As for inflation, analysts projected an average increase of 3.8% in 2022.
"The stable outlook balances elevated geopolitical and domestic political risks and the pandemic-induced deterioration of Israel's fiscal position, against the state's persistently resilient economy, improving budgetary performance, and strong balance of payments," the report said.
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