Foreign trade risk insurance company Coface has removed Israel from its negative watch list, Business Data Israel (BDI) announced today. Coface is one of the owners of BDI. Coface put Israel on its negative watch list last year, at the height of the recession.
Coface's placement of Israel on its list gave rise to concern that Israel would be downgraded from relatively low-risk (ratings A1 through A4) to speculative (B,C, and D). Coface downgraded Israel to A4 in July 2002.
Among the main factors for Israel’s removal from the negative watch list, BDI cited improved economic performance, higher tax revenues, the stronger economic situation of the banks and a significant number of large companies, and the success passing of the tax reform.
Coface’s rating has a direct impact on credit insurance premiums, and on the insurance coverage the company provides to overseas exporters. Consequently, the credit terms granted by overseas exporters to Israeli importers and manufacturers are now expected to improve. BDI believes that these measures will improve Israel’s foreign trade, and cut import and production costs.
Published by Globes [online] - www.globes.co.il - on April 18, 2004