Credit ratings agency upgrades Ireland’s sovereign debt to ‘A’

Credit ratings agency Fitch last night upgraded Ireland’s sovereign debt to ‘A’ from its previous score of ‘A-’ and, in an overall rosy report which will be welcomed by the outgoing Coalition, warned about the risk of prolonged political uncertainty arising from a hung Dáil.

Fitch also said that it was concerned about the Government relying on any bounty from corporate tax receipts.

It cited, however, the fall in the country’s gross debt load — which it now estimated had fallen to 96.6% of GDP at the end of last year from a peak of over 120% of GDP at the height of the financial crisis — as the principal reason for the higher score.

It noted that the exports drive of recent times had significantly boosted growth and consequently reduced the debt ratio as measured against a much larger GDP. And it said the country’s debt load will fall “steadily” by 2024 to 70% of GDP, a figure which nonetheless is still substantially higher than the debt load the country carried going into the banking crisis eight years ago.

“Ireland’s economy continues to expand at a brisk pace,” it said, and “is exhibiting much more solid fundamentals that will help sustain momentum in the short term”.

It expects GDP to grow by 4% this year.