The Fitch Ratings Inc. agency on Friday upgraded Israel’s credit outlook to positive and affirmed Israel’s “A” rating — its sixth-highest investment grade. The company cited Israel’s shrinking deficit and debt-cutting efforts as the reason for the revised outlook.

Israel’s outlook positive. Fitch Ratings headquarters in New York – Photo: Reuters

According to Bloomberg, Fitch predicts that Israel’s budget deficit will fall to 3 percent of gross domestic product in 2014 from 3.8% in 2013.

“The new government has turned around the fiscal position and is committed to a credible medium-term program for further deficit reduction,” Fitch analysts said in a statement issued on Friday.

The New York-based credit ratings agency also affirmed Israel’s long-term foreign and local currency issuer default ratings at A and A+ respectively. Israel’s long-term foreign currency IDR was further upgraded from “stable” to “positive.”

Fitch’s credit rating of Israel joins positive outlooks issued by the world’s two other leading international credit rating agencies — Moody’s Investors Service and Standard & Poor’s.

Still, since Fitch had set its ratings prior to the West reaching an interim nuclear agreement with Iran, it warned against further regional deterioration involving Syria and the Iranian nuclear threat.

The company also noted the government’s effort to curb the deficit and boost the economy’s growth, saying, “The authorities have taken advantage of favorable market conditions to lengthen the average maturity of debt and tap the international market. Debt management and high domestic and external financing flexibility are a rating strength.”

Finance Minister Yair Lapid welcomed the decision, saying that his ministry “will continue to implement responsible and balanced policies that focuses on the middle class and boosting the economy.”

View original Israel Hayom publication at: http://www.israelhayom.com/site/newsletter_article.php?id=13683