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Fitch upgrades Ireland to A- from BBB+ with stable outlook

FXStreet (San Francisco) - Fitch Ratings upgraded Ireland sovereign rating to A- from BBB+ with stable outlook according to a press release published recently.

The agency affirms that "the Irish government has continued its multi-year fiscal consolidation programme following the exit from the Troika programme at the end of 2013 and remains compliant with domestic and eurozone fiscal rules."

Key quotes:

Fitch forecasts the 2014 general government deficit to be below the 4.8% of GDP target and expects a small primary surplus compared with a primary deficit peak of more than 9% of GDP in 2009.

We believe Ireland's gross general government debt (GGGD) to GDP ratio peaked in 2013 at 123%, albeit after an increase of 100pp since 2007 to a level among the highest of Fitch-rated sovereigns.

Market financing conditions have steadily improved over the past two years since Ireland returned to the markets. The yield curve has declined significantly and Irish yields are close to historical lows.

The employment-led recovery of the Irish economy gained momentum in 1Q14 and Fitch forecasts GDP growth of 2.2% this year and 2% in 2015-16. Unemployment continued to decline in 1H14 and reached 11.5% in July 2014, in line with the 11.5% eurozone average, from a peak of 15% in early 2012

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