Credit rating agency S&P completed its semiannual review of Israel’s sovereign credit rating on Friday, leaving it unchanged at A with a stable outlook. The agency did not publish a report, and Israel appeared on S&P’s official list under the heading “Semiannual review, no update published.”
The absence of a report was itself the message. “If our review determines that the key rating factors have not changed, we do not always publish a public report. And that was the case with Israel,” S&P’s Israel spokesperson said Saturday in response to an inquiry from Calcalist. Under the agency’s procedures, a semiannual review can lead to the rating being referred to a ratings committee, which can then take action. In Israel’s case, the review did not reach that stage.
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(Photo: Jewel Samad/Pool Photo via AP)
Under European Union regulations governing credit rating agencies, S&P is required to review sovereign ratings at least once every six months, on dates set in advance in an annual calendar. Any change to a rating or outlook must be published, and the agency says such announcements are issued after 9 p.m. U.K. time. When a rating is affirmed, however, the agency may choose whether to publish a report. This time it chose not to. On the same date, S&P issued detailed reports on Poland, Andorra, Burkina Faso, Uganda and Italy’s Campania region.
For Israel, the result cuts both ways: There is no indication of deterioration, but there is also no movement toward an upgrade. S&P raised Israel’s outlook from negative to stable in November 2025 following the Gaza ceasefire, and affirmed both the rating and outlook in May. In 2026, the agency had already pointed to high defense spending, expected to exceed 7% of GDP this year and remain elevated over the medium term, as a factor weighing on the rating.
The implication is that, in S&P’s view, the factors underpinning Israel’s rating remain as they were in May, including high defense spending. Israel’s rating is still two notches below the AA- level it held before the war. S&P downgraded Israel to A+ in April 2024 and to A in October 2024.
S&P’s silence stands out against publications by the other two major rating agencies. In the week after the election, both Moody’s and Fitch issued special reviews examining the implications of the results, though neither took rating action.
Moody’s rates Israel at Baa1 with a stable outlook. According to its review, the election is not expected to have an immediate impact on the rating because economic, fiscal and security policies are broadly similar across the parties. The main risk it identified is institutional: If the next coalition continues to weaken the independence of the judiciary, the agency could lower its assessment of Israel’s institutional strength.
Fitch rates Israel at A with a negative outlook and highlighted a different risk. According to its review, Israel is likely to face a period of unstable coalitions and caretaker governments, similar to the five election cycles between 2019 and 2022.
Fitch said approval of a 2027 budget before another election is unlikely and that a continuation budget would constrain spending. It also made clear in advance that if the deficit were to fall under such a scenario, it would not regard that as fiscal consolidation. Such a decline would reflect political paralysis rather than sustainable measures to strengthen the government’s finances, and only measures of that kind could lead to a rating upgrade.