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Israel's credit rating holds, but could face downgrade over judicial reform

Fitch recently affirmed Israel’s “A+” rating, but the agency and others have warned about heightened risk in the country related to the government’s controversial judicial reform plans.
JACK GUEZ/AFP via Getty Images

Israel’s judicial reform controversy is continuing to drive concerns about the Israeli economy, prompting warnings from leading credit rating agencies. While Israel’s economic fundamentals remain strong, one expert told Al-Monitor that Israel’s long-term outlook is dependent on future political developments, relations with the Jewish diaspora and other factors. 

Background: On Wednesday, the New York-based credit rating agency Fitch affirmed Israel's “A+” rating and said its outlook on the country is “stable,” meaning Fitch is confident in Israel’s ability to meet its financial obligations. Fitch noted Israel’s strong gross domestic product growth rate of 6.4% in 2022 and declining debt, and predicted inflation will slow to 3% by the end of this year, according to a press release. 

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