Credit rating agency Moody's Investors Service has kept Israel's government bond rating at "A1", with a "stable" outlook.
Moody's said that Israel has high levels of economic, institutional, and financial strength, but that those are offset slightly by "its moderate susceptibility to event risk".
The rating was issued as part of the agency's annual credit report on Israel.
Moody's said that Israel's short term economic outlook is relatively good because the country avoided a real estate bubble and "toxic" bank assets, both of which it called the main sources of the global economic crisis.
Moody's Sovereign Risk Group vice president-senior analyst Anthony Thomas said, "The modest contraction and signs of an incipient recovery are also evidence of the economy's underlying flexibility and exceptional resilience in the face of various shocks. Indeed, against a backdrop of numerous challenges over the past decade, the global financial crisis could almost be categorized as 'more of the same.'"
As Israel's economy is relatively small and export-driven, Moody's said that further economic recovery will depend on global developments. Moody's noted that while Israel's main high tech export markets are the US and Europe, it has made progress in new market areas such as China.
Thomas said, "That the economic model is intact is fortunate. The economy's lack of natural resources and small size leave it few alternatives to being an innovative exporter."
Published by Globes [online], Israel business news - www.globes-online.com - on August 27, 2009
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