Moody’s due to review Ireland’s debt rating status on Friday
Ratings agency lifted Ireland’s government debt rating from junk to Baa 3 in January
Minister for Public Expenditure Brendan Howlin, and Minister for Finance Michael Noonan on the day Ireland exited the bailout. photograph: cyril byrne
International credit ratings agency Moody’s is scheduled to review Ireland’s debt this Friday.
In January, Moody’s lifted Ireland’s government debt rating from junk to Baa 3, the lowest investment-grade rung, but with a positive outlook. Moody’s said the reasons for the upgrade were the growth potential of the economy and the Government’s exit from the EU-IMF bailout.
Analysts say a decision on whether to increase Ireland’s rating again at this week’s review will be closely watched.
In March Moody’s Investors Service lead analyst for Ireland, Kristin Lindow, said there was no doubt the Irish economy had turned the corner. She also signalled that the rating firm is positive that the country will manage its huge debt levels in the coming years.
“GDP notwithstanding, all the indicators that matter as far as Ireland’s domestic economy is concerned reflect that upturn. And it is certainly not a jobless recovery,” she said.
Prior to the financial crisis Ireland held a “triple A” rating. The highest possible.
Fitch ratings last week said some improvement in Euro zone periphery sovereign ratings is possible in a benign scenario of economic recovery and declining debt ratios.
Nevertheless, the agency is generally cautious about the medium-term outlook for the Euro zone as many countries face a long period of convalescence and the risk of relapse.
“We do not envisage any sovereigns in the Euro zone periphery recapturing pre-crisis rating levels in the foreseeable future. This reflects not only the long and difficult adjustment path ahead, but also the legacy of the crisis,” the agency said.