(Alliance News) - Moody's Investors Service on Friday affirmed the long-term issuer and senior unsecured debt ratings for the government of Ireland at A2.
The credit ratings agency also affirmed its stable outlook.
The rating affirmation is attributed to the country's strong economic performance and an improvement in its financial metrics, Moody's said.
The Irish economy has expanded rapidly and is highly competitive, thereby attracting "sizeable" foreign investment. In the first nine months of 2019, real GDP growth came in at 5.9% year-on-year.
However, Moody's warned large investments by multinational corporations have translated into GDP distortions, making them unreliable indicators of the country's underlying economic performance. Potential changes in the global taxation also pose a risk to Ireland's positive performance.
Ireland's fiscal and debt metrics have improved steadily, Moody's continued. However, revenue concentration remains a key downside risk for the public finances.
"Banking sector risk and political risk amid uncertainty over the outcome of Brexit are driving Ireland's susceptibility to event risk together with external vulnerability risk," Moody's said.
Moody's says Ireland's rating and outlook could be upgraded if there is a further material reduction in the public debt ratio, ideally supported by a reduction of revenue concentration risk. Clarity on post-Brexit trading arrangements would potentially also remove a source of uncertainty and increase positive credit pressures.
The rating could go down if the course of fiscal policy changed, putting at risk the downward trend in the debt ratio. Global corporate tax reform could also push the rating down.
By Ife Taiwo; ifetaiwo@alliancenews.com
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