Moody’s Investors Service warns of home-grown risks to economic recovery

Ratings agency Moody’s Investors Service said it will closely watch the next government’s spending plans and monitor private sector pay amid fears the bounty of the hard-won recovery could be wasted by unwise actions and frailties at home.

Moody’s, which during the crisis was the most downbeat of the four main ratings firms on Ireland’s prospects, appears to downplay the potential of economic threats from abroad and instead warns of home-grown risks, if a new government after the election and the private sector were to over-inflate the economy once again.

Yesterday, Moody’s repeated its warnings about the country’s still-high debts, but also signalled out the high-level of soured loans resting on the banks’ loan books.