Sunday 24 September 2017

Budget praised by agency but our rating stays same

Donal O'Donovan

Donal O'Donovan

RATINGS agency Fitch has praised Ireland's 2012 Budget -- but refused to improve the country's credit rating.

It said the Budget showed Ireland's "commitment to fiscal consolidation and determination to hit its targets under an EU/IMF bailout."

Nevertheless, it is keeping its Irish Government borrower rating at BBB+, with a negative outlook.

"The Budget does not alter our negative outlook on Ireland's rating," it said in a note yesterday.

"This reflects the risks to debt stabilisation, including risks to the economic recovery."

Fitch said the target of reducing the deficit to 3pc of GDP by 2015 was feasible, but warned that major risks remained.

It said: "Many years of consolidation, with very little room for slippage, will be needed to make Ireland's public debt sustainable."

Fitch said it expected the Irish economy to grow in 2012, but said that the risk of fallout from the eurozone debt crisis, and the potential of a recession in the eurozone could change that.

While a negative outlook is bad, it means that the current rating is not up for review and so is likely to remain unchanged in the medium term.

That means that the State will keep at least one "investment grade" borrower rating, from the main rating agencies.

Standard & Poors also ranks Ireland BBB+, but has warned that this could be cut if a deal to end the eurozone crisis is not done this week.

Yesterday, Fitch also praised the austerity plans announced by new Italian Prime Minister Mario Monti.

It kept Italy's A-plus rating, but said the outlook remained negative.

Irish Independent

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