Moody’s upgrades Ireland to A3

Moody's Investors Service said it upgraded Ireland's long-term government bond ratings to A3 from Baa1.

The short-term rating was affirmed at Prime-2.

The outlook remains positive.

Moody's said its decision to upgrade Ireland's rating to A3 reflects the following key drivers:

• Ireland's key credit fundamentals have continued to improve at a faster pace than expected even a few months ago, including a stronger economic recovery and a more marked reduction in the public debt ratio, which stood at below 94% of GDP by end-2015. The government's public finances also continued to improve at a rapid pace last year; and

• In Moody's view, the risk of a reversal of the fiscal consolidation seen over the past several years is low. The recent political agreement between the two largest parties in parliament and the recent election of a minority government led by Fine Gael, which has established a strong track record of fiscal management over the past several years, give comfort that the budget deficit will be reduced further in coming years.

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