Ireland’s credit rating has been sinking and on a downslide pattern. This was cut by five notches by Moody’s basing it on the Governments’ austerity measures hinting that it could slow down economic growth. Despite the downgrade, analysts at the credit rating agency still believe that Ireland would not default on its loans.
Taioseach Brian Cowen said that the lowering down of the country’s credit rating is a bit excessive and has a negative impact to businesses. He believed that it was a fairer approach if they have given a more stable outlook rather than a negative feedback. The rating dropped from Aa2 to Baa1 which is the same level as Russia and Lithuania. This rating is also just three levels above junk or non-investment evaluation.
Dietmar Hornung, who is an analyst at Moody’s, said that Ireland already managed high levels of indebtedness in the past and showed their brilliance in handling this difficult situation. However, the Government’s austerity measures can also have a large impact on its economic growth and slow down its financial sector.
Glas Securities, which is an agency based in Dublin, commented on the new rating. They have anticipated the downgrade but not to the mile that it is in right now.
