News Column

Celtic Tiger Roars Back With Moody's Upgrade

July 12, 2013

Ireland cemented its position as the poster boy for bailed-out eurozone strugglers today as ratings agency Standard & Poor's took a brighter view on the fallen Celtic tiger's prospects.

The agency has upgraded its outlook on credit rating _ currently BBB-plus _ from positive to stable, saying its debt may fall faster than expected. The move implies a one in three chance of an upgrade as Ireland nears an exit from its EU/IMF bailout nearly three years after being forced to seek an euro 85 billion (pounds sterling 73.4 billion) rescue.

Ireland has fared much better than bailed-out Portugal and Greece as it gets to grips with public spending, and low corporation tax rates make Dublin an attractive home for international businesses. S&P predicts Ireland's national debt will fall from 122 percent of GDP in 2013 to 112 percent by 2016. "The outlook revision reflects our view that Ireland's general government debt burden is likely to decline more rapidly, as a percentage of GDP, than we had previously expected," it said.

The agency sees the potential for Ireland to grow by 2 percent a year. It praised the "strong consensus" among politicians for fiscal consolidation and reform, while unemployment is falling and house prices stabilising.

The picture contrasts with Portugal, which faces more disarray after its president rejected plans to heal a government rift and called for early elections next year. Greece is in its sixth straight year of recession.

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(c)2013 London Evening Standard

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Source: Copyright Evening Standard (London, England) 2013