S&P Affirms Israel's Credit Rating at A With Stable Outlook

By אדריאן פילוט, כלכליסט

Translated & summarized from Ynet by baba

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S&P Global Ratings has affirmed Israel's credit rating at A with a stable outlook following its semi-annual review, deciding not to publish a detailed report as key rating factors remain unchanged. The agency cited high defense spending as a factor weighing on the rating, which is two notches below its pre-war level. This contrasts with Moody's and Fitch, who have also reviewed Israel's rating and highlighted potential risks related to institutional resilience and political instability.

The story in 5 lines · by baba

S&P Global Ratings maintained Israel's credit rating at A with a stable outlook after its review.
The agency did not publish a detailed report, indicating no significant changes in rating factors.
High defense spending is identified by S&P as a factor negatively impacting Israel's rating.
Israel's current rating is two notches below its pre-war level of AA-.
Moody's and Fitch also reviewed Israel, citing risks from political instability and judicial independence.

S&P Affirms Israel's Credit Rating at A With Stable Outlook — Editorial illustration generated by baba News, not a photograph of the event.

Credit rating agency S&P Global Ratings has completed its semi-annual review of Israel's credit rating and maintained it at A with a stable outlook. The agency did not publish a detailed report, indicating that the key factors influencing the rating remain unchanged. S&P stated that a public report is not always issued when rating factors do not change, which was the case for Israel.

Under EU regulations, S&P is required to review sovereign ratings at least twice a year. While a review can lead to a rating change or outlook adjustment, Israel's review did not progress to that stage. This outcome signifies no immediate concerns about a downgrade but also no indication of an upgrade.

Israel's rating was previously lowered by S&P from AA- to A+ in April 2024 and then to A in October 2024. The agency had revised the outlook from negative to stable in November 2025, following a ceasefire in Gaza. However, S&P has identified high defense spending, projected to exceed 7% of GDP in 2026 and remain elevated in the medium term, as a factor weighing on the rating.

S&P's decision contrasts with recent reviews by Moody's and Fitch. Moody's, which rates Israel Baa1 with a stable outlook, suggested that the recent elections are unlikely to immediately impact the rating due to similar economic and security policies across parties. However, Moody's warned that a continued erosion of judicial independence could negatively affect its assessment of Israel's institutional resilience.

Fitch, rating Israel A with a negative outlook, anticipates a period of unstable coalitions and transitional governments. The agency views the approval of the 2027 budget before new elections as unlikely, potentially leading to a continuation budget that limits spending. Fitch clarified that a resulting deficit reduction would likely stem from political paralysis rather than sustainable fiscal measures, and therefore would not warrant a rating upgrade.