Data from Standard & Poor’s Global Market Intelligence showed that five-year credit risk swaps for Israel jumped by 10 basis points from their level at the close yesterday, Tuesday, to record 160 basis points, the highest level since November 2012, according to Reuters.
Standard & Poor’s Global Ratings lowered its long-term foreign and local currency sovereign credit rating for Israel from “A+” to “A” with a negative outlook.
The negative outlook reflects the risks that threaten the growth of the Israeli economy, public finances, and the balance of payments. The credit rating agency also expected a delay in economic recovery in Israel, and reduced its growth expectations to 0 percent in 2024 and 2.2 percent in 2025, in addition to expectations of a widening of the fiscal deficit in In the short and medium term, with increased defense-related spending.
The ongoing war since last October has led to an increase in Israel’s budget deficit to about 8.3 percent, in addition to expectations that the debt-to-GDP ratio will rise to about 70 percent in 2024, and 72 percent in 2025.
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