Ireland has an “elevated probability” of seeing its creditworthiness upgraded to within one level of the top-notch AAA grade this year, according to analyst with S&P Global, one of the world’s largest credit ratings agencies.
Samuel Tillaray, a sovereign ratings analyst with S&P, said during a presentation for debt investors on Wednesday that the firm expects to decide this year on whether to upgrade Ireland to AA+, from AA currently, having had a “positive” outlook on its rating since November 2024.
He said that S&P tries to “resolve” positive or negative outlooks with an upgrade or downgrade within two years, respectively. Otherwise, the outlook would ordinarily move to stable.
“We’re hoping at some point this year to resolve [the Irish outlook],” said Mr Tillaray, adding that “there is an elevated probability” of an upgrade.
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He highlighted that an upgrade could come if the State “continues to build on economic and fiscal buffers” – and remains competitive, particularly in relation to foreign direct investment (FDI).
The outlook could be lowered to stable if “US trade policy and other global developments were to undermine Ireland’s prospects”, he said.
The world’s leading credit ratings firms stripped Ireland of its prized top credit ratings during the financial crisis, with S&P rival, Moody’s going so far as to downgrade the Republic’s creditworthiness to “junk” status in 2011.
S&P rated Ireland at as low as BBB+, five levels below where it currently stands, but three steps above “junk”, during the worst of the downturn.
The State has enjoyed a slew of upgrades over the past dozen years, after emerging from an international bailout programme and rapidly lowering its debt burden – relative to the size of the economy – as annual gross domestic product (GDP) growth routinely topped the list of EU members.
Three of the world’s four main credit ratings agencies currently have an AA stance on Ireland. Of those, only S&P has a positive outlook attached to its rating.
Credit ratings firms’ actions should theoretically influence borrowing costs for governments and companies, although financial markets are often ahead of the game when it comes to pricing debt.
Irish GDP is forecast by the Government to have grown by almost 11 per cent in 2025, driven a surge of exports in the first quarter. Mr Tillaray noted that the increase had been turbocharged by ingredients for a weight-loss drug produced in Cork – known to be Eli Lilly’s Mounjaro – and that a prevailing narrative last year that exporters were seeking to get ahead of US tariffs had proven to be wrong.
“Pharmaceutical products remain tariff exempt [by the US], despite the threats we’ve seen,” the analysts said.
Most other EU exports are subject to a 15 per cent tariff, following a deal reached with the Trump administration last August. The US president last week backed down on threats to impose further tariffs on eight European countries – which could have spread to cover Ireland if the EU had retaliated – as he dropped a threat to take over Greenland.
Irish economic growth is expected to slow this year – under both GDP and modified domestic demand measures. The Government sees GDP easing back to 1 per cent.
