Fitch reaffirms Israel's A+ rating, warns on tax cuts

Fitch reaffirms Israel's A+ rating, warns on tax cuts

Credit rating agency Fitch today reaffirmed Israel's A+ long-term debt rating with a stable outlook. Fitch said that its rating reflects a balance between strong external accounts, solid macroeconomic performance, and institutional soundness on the one hand, and a still high rate of government debt to GDP, compared with reference countries, and political and security risks on the other, Globes reports.

In response to the retention of Fitch's rating, Minister of Finance Moshe Kahlon said that the rating was "further evidence that in its 70th year, Israel's economy is stronger than ever, and has won great confidence from the world's leading rating agencies. Confirmation of the rating proves that public spending for social ministries can be increased, the tax burden can be reduced, people's disposable income can be bolstered, and a stable and prosperous economy can be developed at the same time."

Ministry of Finance Accountant General Rony Hizkiyahu said, "Reaffirmation of the rate reflects positive fiscal performance, and once again demonstrates the importance of continue a policy that encourages growth, while preserving fiscal frameworks and lowering the burden of debt."

Fitch writes that the government deficit is projected to rise to 2.8% of GDP in 2018 and 3% in 2019. The deficit target for these two years is 2.9%, so the agency's announcement can be interpreted as a warning against deviating from the deficit target for 2019. As for cutting taxes, the rating agency notes that Kahlon spoke in recent weeks about his wish to cut taxes, and comments that there is potential for a tax revenue surplus, as happened in 2015-2017, given the economic momentum, the tight labor market, and unanticipated events. Fitch says that another tax cut incurs a risk if revenue continues to provide surprises at a time when the political parties are preparing for the next elections scheduled in November 2019.

Despite Fitch's compliments about the Ministry of Finance's debt management in recent years, the rating agency states that despite the improvement that has occurred, the volume of public debt in Israel still constitutes a weak point in comparison with other countries with an A rating. Fitch explains that public debt in Israel is still high, although the budget deficit has been less than planned in each one of the past five years, and even though the rate of debt to GDP fell from 95% in 2003 to 60.9% in 2017.

As a comparison, Fitch states that the rate of debt to median GDP in the group of countries rated A by the agency in 2017 was 47%, and the corresponding figure for countries with an AA rating was 42%. Fitch emphasizes that Israel was poorer in both the government budget deficit and the volume of its interest payments than the median for the comparison countries. The agency also pointed out that the strong point of Israel's debt was the 8.4% ratio of external debt to GDP in 2017, compared with 20% in 2006.

Concerning the Israeli economy, Fitch says that growth would remain steady in 2018-2019, although the rate would fall to 3%. Developments listed by Fitch likely to bring about an upside include expansion of Intel's plant and the development of the Leviathan natural gas reservoir. The agency's list of risks includes the possibility of a global trade war, housing market problems, and increased security risks.

Commenting on the situation in Syria, Fitch cited the recent attacks by the Israeli air force and the growing risk of a military conflict with Hezbollah. The agency said that the conflict in Syria continues to be an unsolvable geopolitical complication that was generating a growing risk for Israel, but added that the Israeli economy had demonstrated in the past impressive resilience in the face of military conflicts with various groups in the region.

Kazakhstan to boost export of agricultural products to SCO markets
Kazakhstan to boost export of agricultural products to SCO markets
Kazakhstan, Romania trade turnover increases despite COVID-19
Kazakhstan, Romania trade turnover increases despite COVID-19
Uzbekistan’s 9M2020 export volume of fruits, vegetables revealed
Uzbekistan’s 9M2020 export volume of fruits, vegetables revealed
Loading Bars
Israel says Gazan militants fire 2 rockets into southern Israel
Turkey confirms 2,102 daily COVID-19 patients, 355,528 in total
Moscow records another 62 coronavirus deaths
Trump tests negative for coronavirus ahead of debate: aide
France extends curfew as COVID second wave surges in Europe
Armenians commit provocation during sanctioned protest action of Azerbaijani youth in Poland (PHOTO)
WHO reports record daily rise in coronavirus cases across the globe
ANAMA disseminates info on missile attack on Azerbaijan’s Kurdamir by Armenia (PHOTO)
Car exports to Israel declines, Turkish Trade Ministry
Situation when significant part of Azerbaijan's territory is lost can't last forever, Vladimir Putin
Armenia discloses number of servicemen killed by Azerbaijani army
We already started to plan our future agricultural development with respect of liberation of territories - President Aliyev
Without normalization of relations with Turkey and with Azerbaijan Armenia has no future - President Aliyev
If Armenia makes constructive steps and liberate territories of course, we will open all communications - President of Azerbaijan
Popular Front Party, and Musavat Party going against national interests of Azerbaijan - President Aliyev
With TAP pipeline everything is on the schedule, says president of Azerbaijan
If any country assumes role of mediator, this country must be neutral, says Azerbaijani president
International monitors, peace-keeping forces one of last issues, which had to be addressed - President Aliyev
All the regions of Azerbaijan must be liberated, says President Ilham Aliyev
Azerbaijan is fighting itself, we don’t need any foreign fighters - President Aliyev
There will be no referendum in Nagorno-Karabakh - President Aliyev
If we are attacked, we must not only defend ourselves, but also launch a counter-attack - President Aliyev
Our refugees and internally displaced persons must return to all the occupied territories - President Aliyev
We must have decisive say about international monitors, says Azerbaijani president
If Minsk Group for 30 years cannot produce results, it speaks for itself - President Aliyev
WHO roots for rapid diagnostic tests to boost COVID-19 war in Africa
Kazakhstan to boost export of agricultural products to SCO markets
Int'l organizations informed about rocket attacks on Azerbaijani regions (PHOTO)
Morale of Azerbaijani army personell at high level - Azerbaijani MoD (VIDEO)
With this Armenian government unfortunately, prospects for peaceful settlement very remote - President Aliyev
More military equipment of Armenian armed forces destroyed (VIDEO)
Azerbaijani flag hoisted in Agbend village of Zangilan district (VIDEO)
Central Bank presents forecasts for Uzbekistan’s macroeconomic dev’t
Kazakhstan, Romania trade turnover increases despite COVID-19
With liberation of Aghband settlement, taking full control over Azerbaijani-Iranian state border ensured - President Ilham Aliyev
Azerbaijani Army liberates 3 villages of Fuzuli district, 4 villages of Jabrayil district - President Ilham Aliyev
Azerbaijani Army liberates 13 villages, Aghband settlement of Zangilan district - Azerbaijani president
Russia continues to make active efforts to resolve Karabakh conflict - MFA
OIC Parliamentary Union condemns Armenia's attack on Azerbaijan's Ganja
Azerbaijani RabitaBank's assets for 9M2020 grow
Morocco decreases import of Turkish cars
Uzbekistan, Afghanistan to jointly attract funds for transport corridors dev’t in Central Asia
Uzbekistan, Tajikistan agree on resumption of flights
Armenia's tries to present its position as "peaceful" - total nonsense, Azerbaijan says
Iran to offer loans to support industrial production
Isbank Georgia talks about its cooperation with IFC
Restoration of territorial integrity of Azerbaijan - undoubtedly legitimate process - Georgian expert
Adidas plans to sell ailing Reebok business within months
Cargo transportation between Uzbekistan, Afghanistan grows despite decline in int'l trade
Export of cars from Turkey to France down
Yerevan's foreign policy only possible if Armenia accepts it needs to make peace with Azerbaijan - Svante Cornell
Turkish Trade Ministry says export of domestic cars to China up
Georgia sees increase in price of medicines
Turkmenistan’s geographic location offers potential for country’s economy, says US Embassy in Turkmenistan
Azerbaijan Rabitabank’s net profit for 9M2020 revealed
National Bank of Georgia takes another steps to stabilize lari exchange rate
Procedure for calculating total amount of insurance premiums approved in Azerbaijan
Turkey's export of cars to US edge lower
Karabakh hostilities cause direct disruption to health care amid COVID-19 - WHO
Import of Turkish cars by Azerbaijan declines
Yerevan must withdraw troops, mercenaries and terrorists from Azerbaijan - Turkish Defense Minister
Azerbaijan reveals data on imports for 9M2020
Germany's nine-month import of cars from Turkey down
Apples emerging as export crop for second year in Georgia
Azerbaijan reveals 9M2020 trade turnover volumes with major partners
Nagif Hamzayev: Azerbaijan writes new pages in the world military history
Turkey's 9M2020 export of jewelry to Ukraine doubles
Azerbaijani artillerymen continue to make precise strikes at firing points of Armenian armed forces (VIDEO)
Tender: Khazar Consortium to buy materials for smooth operation of oil field facilities
Int'l organizations miscalculate military arsenal of Armenia - MP
Turkmengas opens tender for purchase of equipment
Uzbekistan’s 9M2020 export volume of fruits, vegetables revealed
MagtiCom leads with highest ARPU rate in Georgia
New apartments inagurated in Iran
Azerbaijan's overall exports for 9M2020 unveiled
Kazakhstan to increase electric vehicles manufacturing by 2022
CO2 emissions prevented in Kazakhstan as renewable energy projects launched
Revenues of mobile operators in Georgia down
Uzbekneftegaz launches condensate stabilization unit at Uzbek oil field
Azerbaijani Embassy in Russia clarifying issue on prohibiting Azerbaijani citizens to use Pobeda Airlines' services
Uzbekistan launches mineral-based engine oil production
Trend News Agency's editor-in-chief tells CNN Turk about ongoing tension in Karabakh (PHOTO/VIDEO)
Russia almost halves jewelry imports from Turkey
Azerbaijan’s AzerGold taking measures on legal assessment of illegal mining in occupied territories
Azerbaijan starts reconstructing roads leading to liberated villages of Tartar (PHOTOS)
Georgian Caucasus Auto Import adds new export markets
USAID promotes warehouse digitization of Turkmen logistics company
Uzbekistan eyes to increase cars export by 4Q2020
Uzbekistan’s private business actively involved in agriculture digitalization
Sanctions must be imposed on Armenia, says Lebanese legal expert
Attacking civilians unacceptable, Israeli ambassador says
Armenia opens additional flights to transfer volunteers to Karabakh (PHOTO)
Number of people infected with COVID-19 pandemic in Iran exceeds 550,000
Azerbaijan's president says Armenia receiving external help, including mercenaries, weaponry
Your statements every evening about how many villages, cities have been liberated from occupation bring joy to people all over Turkey - Turkish Chief Ombudsman
Azerbaijan confirms 171 more COVID-19 recoveries
Turkmenistan's import of Turkish jewelry surges
Value of Azerbaijan's goods export by road edges down
Those unwilling to fight in Armenia buy positive coronavirus test at $1,000-2,000
There is not single surviving building in liberated cities, in these villages, in most of them - Azerbaijani president
All news