Moody's upgrades Ireland's economic outlook from 'stable' to 'positive'

The upgrade means Ireland remains in the fourth-highest level on Moody’s scale

Finance Minister Jack Chambers welcomed the upgrade, saying it "reflects the resilience" of Ireland's economy. Picture: Clive Wasson

Credit ratings agency Moody’s has upgraded Ireland’s economic outlook from "stable" to "positive", reaffirming the country's Aa3 rating on the agency's scale.

The upgrade means Ireland maintains its position at the fourth-highest level of Moody’s scale, three notches below the top Aaa rating.

The firm's credit rating scale encompasses investment grades of both long-term and short-term ratings.

An Aa3 rating means Ireland is rated as having "a high quality and very low credit risk" on the long-term grade. Ireland also maintained its short-term grade rating of P-1, the highest level on the scale.

In a publication on Thursday, Moody’s listed the country’s strong growth potential, robust institutional framework, and proven resilience to external shocks as key determinants of the change of it's economic outlook.

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The ratings firm also predicted a decline to Ireland's gross debt burden and a moderate improvement of debt affordability. 

Ireland achieved an Aa3 rating in April 2023, when Moody's upgraded the country on the strength of improved fiscal and debt metrics.

Finance Minister Jack Chambers welcomed the upgrade, saying it "reflects the resilience" of Ireland's economy, and the Government's commitment to "a balanced and sustainable approach to budgetary policy while continuing to invest in our public services and support households".

He also said that the country's public finances "continue to be exposed to volatile and unpredictable windfall corporation tax, and we should not be using these windfall receipts to fund permanent expenditures".

"That is why the establishment of the two new long-term savings vehicles — the Future Ireland Fund and the Infrastructure, Climate and Nature Fund — are so critical and reflect the importance this Government places on ensuring that we prepare for the challenges that we know are ahead," he added.