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Moody's Says Ireland's Economic Future Is Strong But Warns On Brexit

Tue, 13th Aug 2019 18:24

(Alliance News) - Moody's Investors Service said on Tuesday that the Republic of Ireland's economic prospects are strong though Brexit remains a large risk to the country's growth.

Ireland, which has an A2 stable rating, risks being negatively impacted by Brexit because of its close trading links with the UK, Moody's said.

Senior Vice President Sarah Carlson said: "Ireland's economic prospects are strong on account of substantial competitiveness gains, as well as robust export and productivity growth, which in turn is linked to the expanding presence of multinational corporations.

"Public finances have improved rapidly alongside the economic recovery, the private sector has also reduced its debt levels, and the banking sector is no longer a large contingent liability for the government."

Moody's did however say that because of Ireland's openness and integration in multinationals' global value chains, it has a "high degree of economic volatility".

Aside from Brexit, risks to Ireland's economy include slowdowns in worldwide trade and changes to global taxation rules.

Inflationary pressures are modest, Moody's said, despite unemployment sitting below 5% and wage growth accelerating over the past year.

Moody's added: "The Irish authorities currently foresee a very gradual further improvement of fiscal accounts, as focus turns to boosting infrastructure investment over coming years. A further significant reduction in public debt could lead to a ratings upgrade, while indications of waning commitment to sound public finances and lower public debt could put downward pressure on the rating."

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