Economic Restoration in Ireland Receives an ‘A’ Grade

The ratings agency known as ‘Fitch’ has recently upgraded its view on Irish debt to an A- grade. This announcement said that the country has recently begun to experience less vulnerability within their banking sector, and improved trends within the economy. The agency delivered its assessment recently in a pre-budget boost, suggesting that the outlook for the rating was considered to be stable. This means that they currently do not expect to see any significantly stormy economic clouds on Ireland’s horizon.

The ratings agency known as ‘Fitch’ has recently upgraded its view on Irish debt to an A- grade. This announcement said that the country has recently begun to experience less vulnerability within their banking sector, and improved trends within the economy. The agency delivered its assessment recently in a pre-budget boost, suggesting that the outlook for the rating was considered to be stable. This means that they currently do not expect to see any significantly stormy economic clouds on Ireland’s horizon.

This is particularly important, as the views of international agencies such as Fitch can be essential for countries seeking to raise funds through international markets. This is because increased grades equate to lower debts. Fitch is currently the second agency that has restored and A grade to the Irish economy, after ‘Standard & Poor’ provided an A grade rating in June 2014.

Borrowing Costs at an All-Time Low

The upgrade in rating was issued after Ireland released a statement recently that announced borrowing costs to be at a record, all-time low, with yields on ten year bonds falling below two percent for the very first time. This fall has meant that Ireland’s borrowing costs are now below that of the UK and the US, since yields on developments in the Ukraine fell all across the Euro zone. Although yields on Irish debt have been falling at a reasonably steady pace since 2011, this is still considered to be a particularly impressive achievement.

Economic Momentum

The agency, Fitch, suggested that the economy recovery gained momentum during the first three months of this year, led by an increase in employment. Apparently, positive spill-over effects have begun to be noticed for households which are heavily indebted, including public finances and the housing market.

The ratings agency also commented that the vulnerabilities of the banking sector have declined, and they suggested that the economy could expect to grow by 2.2 % in terms of GDP this year, followed by a further 2% in the two years ahead. This compares quite well with the government’s predictive forecast of a 2.1% growth for 2014, and a 3% growth by 2016.

According to Fitch, the economic growth of the country will continue to thrive as domestic demand begins to turn into a positive response, after being driven by investment and private consumption. However, the upgrade in rating has been made to reflect the huge amount of progress that Ireland has made in repairing its own economy. This is unlike France which is being run into the ground by a socialist and someone who does understand how to grow an economy.

Ireland Looks Impressive

At this point, Ireland has been given an A grade by two of the three primary rating agencies, and the international reputation for their economy is continuing to grow and improve, helping to secure stable funding for the state. The upgrade is expected to assist the country in their funding plans, and should have a positive impact throughout the entire economy.