Moody’s downgrades Ireland
THE international credit rating agency Moody’s has downgraded Ireland’s debt – for the second time since the financial crisis hit.
Moody’s is the last of the three main agencies who help investors assess investment risk to lower Ireland’s rating for a second time.
However, the ratings agency has moderated its outlook for Ireland from negative to stable. Ireland’s rating is now Aa2 from Aa1.
Rival agency Standard & Poor’s, which downgraded Ireland for a second time in April, maintains a negative outlook for the country.
The general government debt-to-GDP ratio was at 64 per cent at the end of last year, up from 25 per cent before the financial crisis took hold, and is continuing to rise.
“The downgrade is primarily driven by the Irish government’s gradual but significant loss of financial strength, as reflected by its deteriorating debt affordability,” said Moody’s lead analyst for Ireland Dietmar Hornung.
He added: “If the GDP growth trend were to exceed Moody’s expectations – with a quick resumption of domestic credit flow and a supportive global economic environment – then the government’s debt metrics could stabilise earlier than is currently being assumed.”