Moody’s slashes Ireland credit rating five notches
Moody’s has today cut Ireland’s credit rating by five notches to Baa1, from Aa2 – citing ongoing uncertainties over the country’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 €85 billion bailout loan from the European Union and the International Monetary Fund.
In other news, official figures yesterday revealed Ireland’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 – albeit, the figure was slightly below expectations.
The former “Celtic Tiger” 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.
Ireland’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 – 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 country’s history.
The austerity budget, aimed at saving €6 billion in spending cuts and tax hikes, is designed the trim the spiralling deficit.
Ireland is aiming to save €15 billion (£13 billion) between 2011 and the end of 2014 – 11% of the economy‘s annual output.