It’s official. International credit rating agencies love Israel. As the Times of Israel discussed. “Fitch Ratings reaffirmed Israel’s A+ rating with a stable outlook on Wednesday night, noting the country’s strong economic performance and a reduction of the fiscal deficit in 2021.”

What’s going on? The proverbial mob on the streets is complaining of inflation. The self-employed are crying out for help. The price of housing, a main cause of inflation, went through the roof in 2021. So why the smile on the face of the Avigdor Lieberman, the Minister of Finance?

First, in terms of basics, the fiscal deficit is clearly under control, for now. After two years of pumping money into the covid economy, that is very important. And unemployment has fallen back to pre-corona levels.

What has sparked the explosion in optimism this week is the news that the Israeli economy had surged forward by over 8% in 2021, beating all market expectations. This immediately prompted positive swings of over 1% in both the exchange rate and the local stock market.

It is too early to say for sure what prompted the upswing. We can speculate about the ever-buoyant tech sector or the fact that the commercial sector found a way to continue operating despite Omicron. There must also be a concern that this stoking of the economy could only add more drive to the upward trend in prices.

However, I take comfort from two factors. First, after three years, the country has a budget in place and that has created an atmosphere of stability in monetary agencies. Second, the exports of goods and services jumped by over 26% in the last quarter of 2021! That is massive, especially considering the strength of the shekel, and bodes well for the future.

As for the rest of 2022, who knows. This is the Middle East. There is new massive trade in the offering, as ties are expanded with Morocco and Bahrain. For now, things are looking up and even further upwards for the Israeli economy.