S&P Affirms Israel's Credit Rating at A With Stable Outlook
Translated & summarized from Calcalist by baba
S&P Global Ratings has kept Israel's credit rating at A with a stable outlook following its semi-annual review, opting not to publish a detailed report. The agency indicated that the core factors influencing the rating have not changed. This decision means no immediate downgrade but also no upgrade, with high defense spending cited as a persistent concern. Other agencies, Moody's and Fitch, also recently reviewed Israel without changing its rating, though Fitch noted potential political instability.
The story in 5 lines · by baba
- S&P Global Ratings affirmed Israel's credit rating at A with a stable outlook.
- The agency did not issue a public report, signaling no change in key rating factors.
- Israel's rating remains two notches below its pre-war level of AA-.
- High defense spending is identified by S&P as a factor weighing on the rating.
- Moody's rates Israel Baa1 (stable) and Fitch rates it A (negative outlook).
Credit rating agency S&P Global Ratings has completed its semi-annual review of Israel's credit rating, maintaining it at A with a stable outlook. The agency did not release a public report, indicating that the key rating factors remained unchanged since the last review. S&P stated that a public report is not always issued when rating factors remain consistent, as was the case with Israel.
According to S&P's procedures, a semi-annual review can lead to a rating committee review and potential action, but Israel's review did not reach this stage. European Union regulations require S&P to examine sovereign ratings at least twice a year on predetermined dates. While a change in rating or outlook necessitates a public announcement, the agency has the discretion to publish a detailed report or not, opting for the latter in Israel's case.
This outcome signifies no immediate deterioration in Israel's creditworthiness but also no movement towards an upgrade. S&P had previously revised Israel's outlook from negative to stable in November 2025, following a ceasefire in Gaza, and affirmed this in May. However, the agency has noted high defense spending, projected to exceed 7% of GDP in 2026 and remain elevated, as a factor weighing on the rating.
Israel's current A rating is two notches below the AA- level it held before the war, following downgrades to A+ in April 2024 and A in October 2024. S&P's silence contrasts with recent reviews by Moody's and Fitch, which issued special reports on the implications of Israel's recent elections without taking rating actions. Moody's rates Israel Baa1 with a stable outlook, citing potential institutional risks if judicial independence is further undermined. Fitch rates Israel A with a negative outlook, warning of potential instability from coalition governments and the unlikelihood of approving the 2027 budget before new elections, which could lead to a continuation budget limiting spending.
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