Economist’s call to lower bond yields

The interest being charged by international investors on long-term Government debt still has the capacity to fall to record lows and should be close to 1% lower than current levels, a leading economist has said.

In Merrion Stockbrokers’ latest bond market review and outlook, chief economist Alan McQuaid suggested that with continued growth in the local economy and with the ongoing stabilisation of Ireland’s political make-up, long-term bond yields should be lower than the 2.26% level currently being seen and closer to the 1.56% levels being charged for Belgian bonds.

“Ireland’s strategy, in recent times, has been to under-promise and over-deliver on the budgetary targets front, which has served the country well in terms of lowering its bond yields dramatically,” Mr McQuaid said.