Credit ratings agency Moody's has warned that Ireland’s sovereign rating could be cut again if there is weaker than expected economic growth, or if budget adjustments were to fall short of the Government's targets.
The ratings agency made the remarks in its annual report on Ireland’s sovereign credit rating.
The report is not a change in the ratings status of Ireland, but rather an annual update to the market.
Moody's last rating action on Ireland was to downgrade by two notches to Baa3, which is still investment grade, but at the low end of the scale.
In its 15 April downgrade it placed Ireland on negative watch, meaning further downgrades were possible, if the country's economic growth faltered, or it fell short of its own targets to balance the books.
It warns that Ireland’s prospects of re-entering the markets for government funding would be more difficult if other Euro zone states run into funding trouble.
Events in other states could also impact negatively on Irelands ratings.
It says Irelands strong exports, flexible labour market and low corporation tax, as well as the Government’s good track record of fiscal and structural reform are key strengths, stronger growth and faster improvement of the budget situation could lead to upward revision of Ireland’s sovereign rating.
