S&P affirms Irish credit rating

STANDARD & POOR’S Ratings Services yesterday said it had affirmed its AAA long-term and A-1+ short-term sovereign credit ratings for Ireland. The outlook is stable.

As the Government continues to pay back debt and as the value of the National Pensions Reserve Fund increases to more than 13% of GDP (with growth of at least 0.5% of GDP annually), the agency expects net debt to decline to 4% of GDP by 2010 from about 9.9% of GDP in 2006.

“The ratings on Ireland could come under pressure, however, if there is an even more severe than anticipated contraction in the housing and construction sectors, undermining output growth, reducing employment, and generating a significant and sustained increase in the government debt ratio,” the agency said.