This upgrade is an important sign of the strength of the Israeli economy, as it reflects the credit rating agency’s confidence in future economic growth and a disciplined government budgetary policy.

For Israel, the higher rating means that it can receive international loans on better terms. The AA- rating puts Israel in good and very select company. Only a relative handful of nations have achieved such a positive rating. Those nations include the Czech Republic and Qatar. Nations with much larger economies, like China and Japan, are rated lower.

The S&P report foresees average annual economic growth of 3.3 percent in Israel through the year 2021. The Israel government was praised for clinging doggedly to its solid budget policies, despite fierce disputes among coalition partners. The government was aided in its fiscal discipline by laws that prohibit the launching of new programs without first securing...

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