S&P upgrades Israel’s rating outlook

International credit rating agency announced on Friday that it was raising its rating outlook for Israel to “Stable”. The rating itself remains at “A”. This is the first positive development in Israel’s credit status after all three major rating agencies downgraded Israel’s rating during the war.

In its announcement, S&P attributed the change in the outlook for Israel mainly to the ceasefire between Israel and Hamas. The agency says that the agreement should reduce the likelihood of tension on a larger scale in Gaza and in the broader region, and that “this could soften pressure on Israel’s economy, labor market and public finances.”

S&P now sees Israel’s economy growing by 5% in 2026, with fewer reserve soldiers being called up, which will ease the tight labor market. The fiscal forecast is also slightly improved, but the debt:GDP ratio is expected to reach 67% by 2028, which compares with a forecast of 55% before the war. And despite talk in the government of tax cuts in the 2026 budget, S&P assumes that tax hikes introduced to pay for the war will not be reversed.

S&P’s rating for Israel is one notch above that of Fitch and two notches above that of Moody’s.

Published by Globes, Israel business news – en.globes.co.il – on November 9, 2025.

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