Fitch Boosts Ireland’ Credit Rating as Economy Strengthens

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Fitch Boosts Ireland’ Credit Rating as Economy StrengthensRatings agency Fitch reviewed Irish sovereign debt to A-, pointing to improved economic indicators and lower risks in banking industry. The agency boosted the rating for the government to BBB+ and disclosed that its rating outlook was stable. This means that there are no major economic upheavals any time soon.

Countries that seek to tap into international markets normally find ratings from agencies such as Fitch very important. By raising Ireland’s rating, Fitch now joins Standard & Poor’s, which raised its rating in June. The new rating was welcomed by Minister for Finance Michael Noonan, the National Treasury Management Agency and Tánaiste Joan Burton, reported the Irish Times.

The credit upgrade comes at a time when Ireland’s interest rates touched a record level on Friday. Yields on 10-year bonds plunged under 2 percent for the first time. This places Ireland’s borrowing costs to less than those experienced in the UK and USA.

“Ireland has retained many of its structural strengths throughout the crisis. It is a wealthy, flexible economy,” said Fitch in latest assessment.

Fitch forecasts the economy to expand 2.2 percent in 2014 and 2 percent in 2015 and 2016 respectively. This contrasts against the government expectations of a 2.1 percent growth this year with an increase to 3 percent in 2006.

Meanwhile, the Bank of England Gov. Mark Carney said that the economy isn’t yet there yet, and indicated that the economy will expand by 3.5 percent in 2014. The bank also expects the gross domestic product to expand by 3 percent in 2015. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com