The significant report from the world's leading credit rating company, S&P Global Ratings, on the Israeli economy is nearing completion. S&P has begun meetings with top economic officials in Israel ahead of the publication of their report in a few weeks and the determination of Israel's credit rating.
Concerns in Israel's economic system now revolve around whether the company would downgrade Israel's credit rating, as Moody's did, or settle for a report that assesses the current economic situation and continues the negative forecast, as Fitch did.
The company's economists are holding their meetings with senior Israeli economic figures via Zoom this time due to the ongoing war in the region. They will convene with, among others, Governor of the Bank of Israel Amir Yaron, Finance Minister Bezalel Smotrich, Accountant General Yali Rothenberg, Head of the Budget Department, and other senior officials.
They will have at their disposal the reports and economic data published by the Central Bureau of Statistics, the Finance Ministry, and other major economic bodies in Israel.
This report from the ratings firm is especially crucial as it will be the third by a credit rating agency on Israel within six months since the outbreak of the conflict. Moody's downgraded Israel's credit rating last month for the first time since the late 1990s, while Fitch settled for a negative rating forecast just last week.
Two weeks after the outbreak of the war, on October 25, Standard & Poor's published an interim report, reaffirming Israel's high AA- rating alongside changing the rating forecast from "stable" to "negative."
On November 14, the agency released negative data on the Israeli economy but refrained from downgrading Israel's high rating. The company then anticipated a deficit of 5.3% in the budget, while the treasury has since determined that the deficit will reach 6.6% this year. The question now is how the economists at the rating agencies will respond. Standard & Poor's also anticipated back then that growth would be only 0.5% in 2024.