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International ratings agency Standard and Poor's has lowered its long- and short-term local currency sovereign credit ratings for Israel , while maintaining its foreign currency rating and predicting a stable outlook.

The local currency rating slipped from AA-/A-1+ to A+/A-1, while the foreign currency ratings remain at A+/A-1, S&P said on Thursday.

S&P's said that it based its assessment on "recent fiscal slippage... exchange-rate pressures and a rising housing market."

"Nonetheless, we believe overall government debt ratios should remain stable in the medium term," it said.

Finance Minister Yair Lapid was quoted on the ministry website as saying the move came as no surprise.

"This is a delayed response to a situation which we are trying to rectify at the moment," he said, adding that "2013 and 2014 are the years in which we shall close our overdraft and, with reform, start to take off."

S&P said its affirmation of the foreign currency ratings "reflects our view of Israel's prosperous and diverse economy as well as the medium-term impact of natural gas production on the external account.

"Our stable outlook signals that we believe that risks to fiscal consolidation and threats to Israel's economic growth will be sufficiently managed to support an A+ sovereign credit rating."