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Standard & Poor's ups Israel credit rating, says outlook stable

Agency lifts country's sovereign credit rating to A+, citing 'strong growth and careful macro-economic management'

AFP, Friday 9 Sep 2011

Standard & Poor's on Friday said it was raising Israel's sovereign credit rating to A+ from A, citing the country's "strong growth and careful macro-economic management."

"Standard & Poor's Ratings Services today raised its long-term foreign currency sovereign credit ratings on the State of Israel to 'A+/A-1' from 'A/A-1'," the agency said in a statement.

"At the same time, we affirmed the local currency ratings at 'AA-/A-1+'. The outlook is stable."

S&P said the wave of social protests which have swept Israel over the past two months over the spiralling cost of living were unlikely to have a major impact on government spending.

"In our assessment, there will only be limited changes to the current biannual 2011-2012 budget, with the deficit reaching 3 per cent in 2011 and declining marginally toward 2 per cent," it said.

"Having weathered the global financial crisis well, Israel is on a credible path toward continued government debt burden reduction and stronger external indicators," it added.

"The production of natural gas by the middle of the decade is likely to further increase the economy's efficiency as well as strengthen its fiscal and external positions."

Last month, the agency downgraded the rating on nearly $6 billion in US-backed Israeli government bonds to AA+ from AAA after taking the same action on the rating of the United States itself.

The rating on those bonds is unchanged, a spokesman at S&P's London office told AFP on Friday.

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