After a round of meetings with economic entities, the international credit rating agency Fitch is following with concern developments and decisions regarding the legislation planned for the coming days. The company's economists, who visited Israel this week, are expected to publish their decision on Israel in early August.
According to senior economic sources who met with members of the Fitch delegation, the company's economists are well aware of all the developments and have spoken to many parties and also seen the protest.
Tens of thousands of marchers arrived in Jerusalem
According to the sources: "Fitch is aware that the State of Israel has a strong economy, but they want to see what will happen with the legal issue. They are aware of the damage so far of the legislative process to investments in high-tech and to activity in general."
The sources added: "For Fitch, not extending the governor's appointment for a second term would be a worrying development, but they are aware that it could take several more months before Netanyahu decides on this. As you know, the prime minister decides only at the last minute."
Just a month and a half ago, Fitch issued a special update regarding Israel, according to which the credit rating may rise, but the warning about the reform is still on the table. The update states that Israel's credit rating may rise against the background of the expected decline in the debt-to-GDP ratio, relatively strong growth, and the passage of budget approval.
Broad consensus will make it possible to overcome tensions
"Israel continues to face high levels of internal social and political tension, and advancing certain policies favored by the ruling coalition could exacerbate these tensions and affect the rating," the company's economists wrote in late May.
The government has a decisive influence on credit ratings. Netanyahu, Photo: Gideon Markowitz
It should also be noted that similar questions are likely to be asked soon by economists at S&P, a rating agency that left Israel's credit rating unchanged at AA in mid-May and its credit rating forecast "stable" among the 20 countries with the highest rating in the world.
According to the company's announcement, its basic scenario is based on the assumption that some agreement will be reached regarding the legal reform, which will make it possible to overcome tensions in the company.
Wrong? We'll fix it! If you find a mistake in the article, please share with us