JERUSALEM, May 12 (Reuters) - Credit ratings agency S&P
on Friday affirmed Israel's "Aa-/A-1+" rating and kept its
outlook stable, but warned that fallout from a highly contested
judicial overhaul could hamper growth.
Israel's government is trying to push through changes that
would give politicians greater sway over selecting judges and to
limit the power of the Supreme Court to strike down legislation.
The plan has sparked months of mass protests.
Prime Minister Benjamin Netanyahu, under pressure at home
and abroad, has agreed to delay the overhaul to try to negotiate
a middle ground, and focus has shifted to passing a state budget
before an end-of-the-month deadline.
"Our current baseline scenario assumes that elevated
domestic tensions will ultimately be de-escalated and some form
of consensus will be established," the agency said.
"Even though we expect tensions to ease, the current
uncertainty is likely to weigh on growth in the near term in our
view," it said. "While it is difficult to quantify, spillover
effects could include the postponing of both domestic and
foreign investments, as domestic corporates and overseas
investors delay their spending decisions."
Israel's central bank, its securities regulator, and senior
Finance Ministry officials have all warned that the judicial
overhaul might impact investor sentiment and hurt the economy.
Last month credit ratings agency Moody's downgraded its
outlook for Israel, saying the country's institutions were less
predictable given the government's handling of domestic events.
S&P forecast Israel's economic growth to be 1.5% in 2023.
It cited Israel's "resilient economy, strong balance of
payments, and moderate level of public debt" in keeping its
outlook stable.
(Reporting by Ari Rabinovitch in Jerusalem
Editing by Matthew Lewis)
Messaging: ari.rabinovitch@thomsonreuters.com@reuters.net))
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.