Standard & Poor's (S&P) Rating Services assigned its "AAA" senior unsecured debt rating to the Ireland's upcoming 4.5 per cent, €6 billion bonds maturing in October 2018.
Ireland is expected to issue the bonds on October 23rd this year. The ratings on Ireland are supported by the diversified, resilient, and flexible nature of its economy, and its favourable demographics, the agency said.
S&P said Ireland's young population and its commitment to pre-fund future pension liabilities in the National Pensions Reserve Fund (NPRF) mean that the fiscal impact of population ageing will be felt later and less severely than in other European countries.
As the Government continues to pay back debt and the value of the NPRF increases, S&P expects net debt to decline to 4 per cent of GDP by 2010 from around 9 per cent of GDP.
As the housing market boom comes to an end, S&P said it expects annual GDP growth to be 4 per cent in the medium term, down from an average of 5 per cent over the past five years.
It also said Ireland faces the challenge of eroding competitiveness as labour costs rise, resulting in a widening current account deficit. Moreover, inflation is higher than in other euro zone countries.