A leading US credit rating agency downgraded the outlook for Israel’s credit rating on Friday. The move reflects continued concerns about Israel’s trajectory amid the controversy over the government’s judicial reform plans.

Moody’s investor service updated Israel’s credit outlook from "positive" to "stable." The agency did not lower Israel’s credit rating, which currently stands at A1.

The New York-based agency said the decision was driven by a “deterioration of Israel’s governance” related to the judicial reform.

“The change of outlook to stable from positive reflects a deterioration of Israel's governance, as illustrated by the recent events around the government's proposal for overhauling the country's judiciary,” noted Moody’s in a statement. “While mass protests have led the government to pause the legislation and seek dialogue with the opposition, the manner in which the government has attempted to implement a wide-ranging reform without seeking broad consensus points to a weakening of institutional strength and policy predictability.” Moody’s added that the “positive economic and fiscal trends” it identified in previous assessments will remain if a solution on the reform is reached.