JERUSALEM (Sep. 27)
Israel’s credit rating among nations has plunged, it was reported here today as the Bank of Israel recorded a soaring external debt.
A report just issued by the International Monetary Fund (IMF) placed Israel 65th among the 107 countries on its “credit credibility” list. The rating is worse than those of Mexico (60th) and Brazil (51st), two countries recently on the brink of financial disaster. It puts Israel on a par with Egypt, Chile, the Philippines and Uruguay which are among the poorest credit risks, according to the IMF,
The respected economic publication, “Euromoney,” has Israel in an even worse position. It rates it 83rd among 116 countries and among the 19 countries with the largest foreign debt.
According to figures released here today by the Bank of Israel, the country’s central bank, the foreign debt increased by $550 million during the first six months of 1983 and now stands at a record $21.5 billion. By July, 1984, Israel must repay debts in the sum of $5.3 billion, 11.5 percent more than the debts it paid back last year.
Because of this situation, Israel was reported willing to accept a reduction of U.S. military purchase loans next year if a larger proportion of U.S. economic assistance is offered in the form of grants rather than loans. Israel has asked Washington to substitute a $425 million grant for a projected loan of $850 million, it was reported here today.
According to Dov Genihovsky, economic analyst of Yediot Achronot, the meaning of the data released today is that the sources from which Israel has grown accustomed to drawing funds are drying up. Israel is learning the hard way that it is becoming more and more difficult to obtain credit on the world market, Genihovsky wrote.
Meanwhile, the care-taker government which must function until a new coalition is formed, has suspended all economic measures that might at least have had a cosmetic effect. The only visible action was to further devalue the Shekel which today stood at 64.09 to the dollar.