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Moody’s Reaffirms Israel’s A1 Rating, Cites “Close Ties with the US” and “Friendly Relations” with Neighbors

Moody’s yesterday affirmed Israel’s A1 rating, primarily citing the resilience and growth of the Jewish state’s economy. The rating agency declared that Israel’s “high-tech niche and entrepreneurial culture have continued to underpin its latent dynamism,” and noted that official reserves have risen “to record high levels.”

The rating agency also emphasized, however, a variety of geopolitical and diplomatic dynamics underpinning Israel’s economic robustness:

“The geopolitical risks facing Israel represent a perpetual constraint on the government’s rating, with Iran’s nuclear program being the largest threat to Israeli territorial security. However, a certain status quo has been achieved by maintaining a strong military deterrent, close ties with the US and friendly relations between the Israeli, Egyptian and Jordanian armies. Moreover, even incremental progress on the renewed peace negotiations with the Palestinians could have some positive ramifications by helping to reduce Israel’s international diplomatic isolation.

Israel’s start-up culture most recently became global news when the Israeli maps mobile application Waze was purchased by Google for over one billion dollars. A few months ago billionaire investor Warren Buffett declared that Israel is the “most promising investment hub” outside of the United States. A recent innovation summit highlighted how Israeli knowledge and technology could be used to help solve some of Asia’s most pressing problems.

[Photo: Hanay / Wiki Commons]