Moody’s slashes Ireland credit rating five notches

| December 17, 2010

Moody’s has today cut Irelanda��s credit rating by five notches to Baa1, from Aa2 – citing ongoing uncertainties over the countrya��s public finances.

Moody’s said its downgrade reflected the problems in the Irish banking system, the “increased uncertainty regarding the country’s economic outlook; and… the decline in the Irish government’s financial strength.”

The downgrade comes just one week after Fitch slashed its ratings on Ireland by three notches from A+ to BBB+.

In addition, last month, Standard & Poor’s reduced its short and long-term credit ratings by a notch, and put Ireland on credit watch.

The downgrade comes just weeks after Ireland agreed an a��85 billion bailout loan from the European Union and the International Monetary Fund.

In other news, official figures yesterday revealed Irelanda��s economy experienced growth in the July to September period.

The economy expanded by 0.5% in the third quarter compared with the previous quarter a�� albeit, the figure was slightly below expectations.

The former a�?Celtic Tigera�? economy contracted in the second quarter after emerging from recession in the January to March period.

As a result, Ireland was one of the last euro zone nations to emerge from recession.

Irelanda��s economy was one of the worst performers in the western world last year and prior to the current downturn, the Irish economy had not experienced a recession since 1983.

The economy slipped into recession during the first half of 2008 a�� becoming the first nation of the euro zone to do so.

Earlier this month, the Irish parliament approved one of the toughest budgets in the countrya��s history.

The austerity budget, aimed at saving a��6 billion in spending cuts and tax hikes, is designed the trim the spiralling deficit.

Ireland is aiming to save a��15 billion (A?13 billion) between 2011 and the end of 2014 a�� 11% of the economya�?s annual output.

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