Fitch upgrades Ireland to A

Fitch Ratings said it upgraded Ireland's long-term foreign and local currency issuer default ratings to A from A-.

The outlooks are stable.

The issue ratings on Ireland's senior unsecured foreign and local currency bonds were also upgraded to A from A-.

The country ceiling was affirmed at AAA and the short-term foreign currency issuer default rating and short-term commercial paper at F1. The rating of National Asset Management Ltd.'s (NAMA) guaranteed issuance was affirmed at F1, in line with the sovereign rating.

Public debt dynamics continue to improve, reflecting a combination of strong growth and a return to a primary budget surplus in 2014, Fitch said. It now estimates gross general government debt/GDP at 96.6% at end-2015, compared with 105% in its previous review and from a high of 120.2% in 2012. The revision is partly the result of a much higher than expected GDP deflator in 2015, with Ireland benefiting substantially from positive terms of trade.

According to the agency’s baseline scenario (which does not include any positive stock-flow adjustments from the banking sector), public debt will continue to fall steadily to 70% by 2024, although this is still well above the A median of 44.5%.

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