Irish Companies Confident Despite Inflation Pressures
Irish companies are feeling optimistic about their prospects, with improving demand for exports and a strong growth forecast, according to the Accenture-S&P global Ireland business outlook survey. Despite global economic challenges, Ireland’s growth forecast has emerged as the strongest globally. There are, however, challenges such as wage pressures, labour shortages, and strong market competition. While inflation pressures from energy and raw material costs are easing, Irish companies still plan to pass on these cost increases to customers.
The survey also revealed that Irish firms are planning to expand their product offerings into new international markets, with a particular interest in opportunities in Europe. The survey, which is based on responses from 12,000 firms in manufacturing and services around the world, highlighted a sustained sense of optimism among Irish private sector companies, driven by expected improvements in export performance.
In addition to the positive outlook for Irish companies, ratings firm Fitch has expressed a positive outlook on Irish sovereign debt. Fitch expects large budget surpluses in the coming years, which contributes to the positive outlook. The budget surplus is forecasted to be above €12bn in 2024 and 2025, according to Fitch.
While the survey and Fitch’s positive outlook are not credit upgrades in themselves, they indicate the potential for a rating upgrade in the future. The current rating of ‘AA-‘ could be subject to an upgrade by Fitch, given the favourable budget position and strong growth forecast for Ireland.