Channels

Finance Minister Yuval Steinitz
Photo: Mark Israel Sellem

Treasury’s dirty trick?

Finance Ministry publicize selective excerpts from Fitch report, buries unflattering remarks

On the eve of Israel's Independence Day celebrations, Fitch Rating decided to affirm Israel's credit rating, retaining its A rating with a stable credit outlook.

 

Israel’s Ministry of Finance hurried to issue a press release of the decision and publicized a partial translation into Hebrew of the statement. The Ministry routinely translates such statements, yet in this case, it chose to translate and publicize only the sections that flatter Israel and to omit the disconcerting and less flattering remarks.

 

The Ministry of Finance began its statement by noting that the rating agency "positively noted the impressive macro-economic performance of Israel's economy which is diversified and has a strong external balance.” However, the latter part of the sentence was omitted from the Treasury’s statement, perhaps because it mentions the "high level of government debt and concerns over the geo-political situation."

 

Fitch's warnings are mentioned only at the end of the Ministry's statement and even then only as part of Accountant General Michal Abadi-Boiangiu's remarks on the matter.

 

Iran concerns

Later in the statement, the Ministry quoted Fitch senior director Richard Fox saying "With tighter international sanctions against Iran only just taking hold, and talks between Iran and the international community recently resumed, near term hostilities seem unlikely."

 

However, the Treasury failed to mention Fox's assessment which immediately follows: "The longer the impasse continues, the higher is the risk of hostilities breaking out. In that event, it would likely lead to immediate negative rating action, with the final rating outcome depending on the extent of the economic and physical damage that Israel might suffer."

 

Insofar as economic growth, the Ministry of Finance quoted Fitch's forecast for a 3.5% growth rate for next year as compared with 3% this year. Fitch's further comments on Israel's growth were not, however, mentioned, probably due to the fact that Fitch noted longer-tem concerns due to the expected decline in the growth rate of the working age population in Israel in the next decade.

 

Original story published by Calcalist

 

 


פרסום ראשון: 04.30.12, 15:25
 new comment
Warning:
This will delete your current comment