Under Nvidia's influence: S&P raises Israel's growth forecast

S&P raised Israel's growth forecast to 5.5% in 2026 and 7% in 2027, mainly due to Nvidia's impact. The agency published a special review without a credit rating, and addressed security risks, elections, and budgetary pressure.

Credit rating agency S&P published a special review of the Israeli economy this morning, which does not include a new credit rating. In the review, the agency raised Israel's growth forecast to 5.5% by the end of 2026 and 7% in 2027, mainly due to the impact of Nvidia's activity on the economy. The agency assessed that security risks will remain high, and that there is a risk of another confrontation with Iran. It also referred to the results of the elections in Israel, noting that a change of government could affect the diplomatic approach and the reduction of draft exemptions for Haredim. The agency expects growth to remain strong but budgetary pressure to stay high due to defense spending. The debt-to-GDP ratio stood at 68.5% last year, and is forecast to reach 65.2% by 2029. The agency praised the Bank of Israel for flexible monetary management.