A day after Moody's Investors Service announced it was putting Ireland under review for a possible downgrade
, Fitch Ratings lowered the country's credit grade
to A+ from AA-. Fitch's downgrade was prompted by the Irish government's announcement last week that it's pledging more money -- as much as €50 billion -- to save Ireland's banks. The downgrade was further fueled by uncertainty over the country's economic recovery.
"The downgrade of Ireland reflects the exceptional and greater-than-expected fiscal cost associated with the government's recapitalization of the Irish banks, especially Anglo Irish Bank," Fitch said in a statement
Not only that, but Fitch also said it may downgrade Ireland further if the economy stagnates and the government can't find political support for budget cuts. Fitch's rating of Ireland is already the lowest among the major rating companies.
Moody's review, initiated Tuesday, was also prompted by Dublin's rising borrowing costs. These are set to climb further following Fitch's downgrade.
Ireland's move last week to save the nation's banks pushed the general government deficit to around 32% of GDP this year. Meanwhile, Bloomberg also reported that Irish consumer confidence last month plunged the most in over four years.