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By Trend

Global credit rating agency Moody's Investors Service has changed the outlook on the Israeli government from stable to positive and maintained its sovereign credit rating at "A1," said Israel's Ministry of Finance, Trend reports citing Xinhua.

The key drivers for the upgrade in outlook were the government reform agenda and expectation of a further reduction in its debt ratio, helped by continuing strong economic growth, Moody's said.

The reform agenda aims to address Israel's key longer-term challenges of moderate productivity growth and relatively low labor participation of some population groups, it noted.

Last year, Israel's fiscal metrics improved faster than expected, helped by buoyant tax revenues against the backdrop of solid and resilient growth, as well as the near-complete tapering of coronavirus-related expenditures, Moody's added.

The agency thus forecasts a budget deficit of 3.4 percent of GDP in 2022, lower than the government target of 3.9 percent.

In April 2020, the rating agency downgraded Israel's outlook from positive to stable due to a high deficit, the coronavirus crisis and political instability.

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