Moody's lifts Ireland

Moody's Investors Service said it raised the government of Ireland's long-term issuer ratings to A1 from A2. Concurrently, the agency upgraded Ireland's senior unsecured bond and MTN program ratings to A1 and (P)A1 from A2 and (P)A2, respectively.

The agency noted the pandemic and Russia’s war with Ukraine illustrate Ireland’s increased resilience.

In 2021, real GDP grew by 13.5% in 2021 following a 5.9% expansion in 2020.

“While Ireland imports around 70% of its energy needs, it does not import any natural gas directly from Russia, and Russian oil imports have been low and can easily be replaced by other supplies on international markets. However, higher energy prices are putting pressure on inflation (which was already under pressure due to housing supply issues). These will weigh on economic growth in 2022, but Moody's does not expect that they will cause lasting damage to Ireland's growth potential,” the agency said in a press release.

Additionally, robust economic growth helped lower government debt and Moody’s said it sees the decline in debt continuing. “Moody's forecasts that debt dynamics will improve from 2022 onwards, resuming the trend recorded in the years leading up to the pandemic. Compared to peers, Ireland's deterioration in fiscal metrics was relatively benign in 2020 and has not reversed pre-pandemic improvements,” Moody’s noted.

The outlook remains positive.

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