19 May 2023
By Tom Collins
tom@TheCork.ie
Minister McGrath welcomes S&P upgrade of Ireland’s Sovereign Credit Rating to AA – S&P statement here https://disclosure.
The Minister for Finance Michael McGrath has welcomed the upgrade of Ireland’s long-term sovereign credit rating by S&P to AA from AA- with a stable outlook. It is the agency’s first change to Ireland’s long term rating since November 2019.
Recent picture of Minister for Finance Michael McGrath at a different event. The TD is based in Carrigaline.
The revised rating returns Ireland to S&P’s AA category for the first time since August 2010. This is the 3rd highest category within S&P ratings.
The upgrade puts Ireland’s rating on a par with core Eurozone countries France and Belgium. There are now just 5 countries in the euro area with a higher S&P rating (Germany, Luxembourg, Netherlands, Austria and Finland).
The Minister for Finance Michael McGrath said:
“The announcement by S&P of an upgrade to Ireland’s sovereign credit rating, coming just 4 weeks after an upgrade by Moody’s, is a further vote of confidence in the Irish economy and the management of the public finances.
“I am determined that the progress we are making in putting the public finances on a sound long term footing will be further advanced in the period ahead. A total of €6 billion has now been transferred to the National Reserve Fund to strengthen our fiscal buffers and I recently published a Departmental paper setting out high level principles regarding a more long-term focused savings fund.
“While I am confident we will have resources from recurring tax revenues to reduce the burden of income tax, increase core welfare payments, invest in public services and our infrastructure, in Budget 2024 and beyond, we have a once in a generation opportunity to use some of the windfall receipts to put the nation’s finances on a more sustainable, long-term footing.
“This will be an important initiative to secure the future wellbeing of our economy and society and will require bringing legislation to the Oireachtas setting out how such a fund will be built up and the circumstances in which we will draw on it. Work on this by my officials is continuing and I intend to bring a more detailed proposal to government for consideration in the coming weeks.
“The publication of the Summer Economic Statement will provide detail on the Government’s approach to managing the forecast budget surplus and how we can maximise the long-term benefit for society.”
Additional Information:
- S&P’s AA rating is their third-highest long-term rating (after AAA and AA+)
- A ratings upgrade typically increases the potential pool of investors for a country’s sovereign debt as some investors require a minimum rating in order for it to be included in their portfolios.
- S&P’s long-term ratings actions towards Ireland
November 2019: Upgrade to AA- from A+
June 2015: Upgrade to A+ from A
December 2014: Upgrade to A from A-
June 2014: Upgrade to A- from BBB+
April 2011: Downgrade to BBB+ from A-
February 2011: Downgrade to A- from A
November 2010: Downgrade to A from AA-
August 2010: Downgrade to AA- from AA