Fitch upgrades Ireland rating outlook to stable

Fitch Ratings on Wednesday revised its outlook on Ireland to stable from negative, while affirming the country’s BBB plus credit rating, which is two notches above junk status. The upward revision to the country’s rating outlook “reflects Ireland’s continued progress with its fiscal consolidation, external adjustment and economic recovery, as well as the sovereign’s improved financing options,” Fitch said, in an emailed statement. Although Fitch expects flat Irish GDP growth in 2012 after 1.4% growth in 2011, that would still beat the euro-zone average of minus 0.5%, the ratings firm said, and would outpace other so-called peripheral countries. Ireland has also made signifcant steps in returning to market financing, but its rating still faces downside risks from high debt levels, continued vulnerabilities in the financial sector and its sensitivity to external demand and financial conditions, Fitch said.

Fitch Ratings has pointed to Ireland’s ongoing return to market financing, pointing to the issue of five and eight-year bonds in August and September at lower yields.

RTE rported that The National Treasury Management Agency welcomed the Fitch announcement as “encouraging.”