Moody’s Warns Israel’s New Budget Could Downgrade Credit Rating

The Jerusalem Post reports: Credit ratings agency Moody’s on Thursday warned that the 2017- 2018 state budget proposal could be a step toward undermining Israel’s solid A1 credit rating.

“The rating or outlook could come under downward pressure if the commitment to fiscal discipline over the medium term was to wane,” the agency wrote in its annual Credit Analysis of Israel’s government.

The budget proposal, it noted, nearly doubles the rate of tax spending while slashing taxes, meaning the chances for fiscal consolidation are less likely.

“Politicians are apparently taking for granted the tax buoyancy of recent years, which derives from the re-balancing of growth toward consumption and away from exports and is likely to be temporary.

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