Moody’s raises Ireland’s rating
January 19, 2014 - 7:31:54 am
DUBLIN: Moody’s raised Ireland’s sovereign debt rating yesterday, pulling it out of junk territory to an investment-grade Baa3 in recognition of the eurozone country’s exit from a huge EU-IMF rescue programme.
One month after Ireland reclaimed its economic independence, the ratings agency also placed the country on a positive outlook, citing the economy’s growth potential and improved debt outlook.
The one-notch ratings increase from Ba1, which had weighed on Ireland’s ability to raise funds on capital markets, was tied to a recent rise in economic growth.
Moody’s lead analyst for Ireland, Kristin Lindow, said the positive outlook suggested improved sentiment for the cash-strapped eurozone nation.
“The upgrade reflects the growth potential of the Irish economy which together with the fiscal consolidation, expected to continue over the next few years, will help bring down the very high debt levels,” Lindow said.
Moody’s noted that Ireland exited its programme of support from the European Union and the International Monetary Fund on December 15 “on schedule, with improved solvency and restored market access”.
“Its ability to do so without a precautionary credit line reflects that the government’s reform agenda stayed largely on track” despite challenging economic conditions inside and outside the country, the agency said.
Irish Finance Minister Michael Noonan welcomed the ratings upgrade as proof of the changes made since the global financial storm in 2008 brought the once booming ‘Celtic Tiger’ economy to its knees.
“The decision by Moody’s to upgrade Ireland’s credit rating reflects the significant progress that has been made in stabilising the public finances, restructuring the banking sector and, most importantly, growing the economy and creating jobs,” he said. AFP