Standard & Poor’s hikes Ireland’s credit rating, maintains negative outlook for Italy
Ireland's recovering economy continues to impress economic analysts as ratings agency upgrades assessment and predicts further improvement, while Italy languishes in negativity
Standard & Poor’s on Friday revised up Ireland’s sovereign credit rating to ‘A-’ with a positive outlook from its previous ‘BBB+’ assessment, citing the eurozone member’s improved domestic prospects.
In contrast, the ratings agency held Italy’s credit rating at ‘BBB’, which is two notches above junk level, and maintained its negative outlook.
“The upgrade reflects our view of the brightening prospects for Ireland’s domestic economy, which we expect to underpin further improvements in the government’s financial profile, capital markets access, and financial system asset quality,” S&P said in a statement.
The agency also ramped up its 2014-2016 average gross domestic product (GDP) growth projections for Ireland to 2.7 per cent from 2.0 per cent previously.
“We believe the domestic recovery is broadening and has gathered pace in the first quarter of this year,” S&P added.
“Full-time employment grew by 2.3 per cent from the 2013 March quarter to the 2014 March quarter, with the unemployment rate estimated to have declined to 11.8 per cent in May this year, the lowest since April 2009.”