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Standard & Poor's upgrades Ireland's credit rating outlook to positive | Standard & Poor's upgrades Ireland's credit rating outlook to positive |
(about 2 hours later) | |
Standard & Poor's has upgraded its outlook on Ireland's credit rating to positive from stable, saying the government may beat its fiscal targets and cut its debt faster than expected. | |
The move on Friday comes six months ahead of the country's planned exit from its EU/IMF bailout, which will require a full return to borrowing on bond markets. It will also be a boost to sentiment after data last month showed Ireland had unexpectedly tipped into recession for the first time in four years. | |
S&P maintained its BBB-plus rating, leaving Moody's as the only major rating agency that rates Irish sovereign debt as non-investment grade. | S&P maintained its BBB-plus rating, leaving Moody's as the only major rating agency that rates Irish sovereign debt as non-investment grade. |
"The outlook revision reflects our view that Ireland's general government debt burden is likely to decline more rapidly, as a percentage of GDP, than we had previously expected," S&P said in a statement. | "The outlook revision reflects our view that Ireland's general government debt burden is likely to decline more rapidly, as a percentage of GDP, than we had previously expected," S&P said in a statement. |
"This is due to sustained budgetary consolidation, stabilising domestic demand, and higher receipts from government asset sales." | "This is due to sustained budgetary consolidation, stabilising domestic demand, and higher receipts from government asset sales." |
It said it saw a more than one-in-three probability it would raise Ireland's credit rating during the next two years. | It said it saw a more than one-in-three probability it would raise Ireland's credit rating during the next two years. |
S&P said it expects Ireland's national debt to peak at 122% of GDP in 2013 but decline to 112% by 2016. | S&P said it expects Ireland's national debt to peak at 122% of GDP in 2013 but decline to 112% by 2016. |
S&P's had the country on negative outlook until February, when Dublin struck a long-awaited deal with the European Central Bank allowing it to convert promissory notes into long-term bonds. The deal effectively gave Dublin far longer to repay debts it ran up in rescuing the Irish banking system. | S&P's had the country on negative outlook until February, when Dublin struck a long-awaited deal with the European Central Bank allowing it to convert promissory notes into long-term bonds. The deal effectively gave Dublin far longer to repay debts it ran up in rescuing the Irish banking system. |
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