Finance Minister Moshe Kahlon on Sunday told Army Radio that he deserves the credit for Standard & Poor’s new, improved assessment of Israel’s credit rating from A+ to AA-, the highest rating the Jewish State has ever received, and just short of S&P’s highest rating, AAA.
“If the headlines were reversed, they would hang me in the city square,” Minister Kahlon told Army Radio, adding victoriously, “For three and a half years they have been criticizing my actions, but today I’m happy.”
Israel shares the AA- spot with Bermuda, Chile, China, the Czech Republic, Estonia, Japan, Saudi Arabia, and Taiwan.
“Israel has demonstrated sound economic performance since the global financial crisis, with a current gross domestic product (GDP) of about $140 billion (or 50%) larger than in 2010, the current account in a sustainable surplus, and unemployment at historical lows,” S&P noted.
The countries enjoying the top, AAA rating are Canada, Denmark, Finland, Germany, Hong Kong, Liechtenstein, Luxembourg, the Netherlands, Norway, Singapore, Sweden, Switzerland, and the UK.
The US credit rating is AA+.
Standard & Poor is considered one of the Big Three credit-rating agencies, which also include Moody’s Investors Service and Fitch Ratings.
For the record, S&P said it expects that “fiscal slippages leading to a significant reversal of the debt path are unlikely” in the Israeli economy. “This is based on our belief that, absent global trade shocks, Israel’s economic growth outlook will remain solid and allow the government to accommodate pressures coming from social and infrastructure spending, as well as a potential moderate escalation of security risks.”
The cornerstone of irresponsible social and infrastructure spending S&P is still worried about comes from Minister Kahlon’s bizarre plan to crush the real estate private investment market with forbidding taxes on purchases of third apartments and more, while forcing on the country a dubious, Soviet-style, poor quality housing for young couples. S&P is essentially saying that the Israeli economy is robust enough to survive Minister Kahlon’s destructive tendencies.
Kahlon promised that the minus sign next to the AA “will disappear in a year.” It should be noted that while boosting Israel’s credit rating, S&P also demoted Israel’s economic outlook from “positive” to “stable.”