Rating agency Moody’s raised Ireland’s sovereign credit rating from A2 to A1 with a positive outlook.

The new rating is the highest given to Ireland by Moody’s since 2010 and its first upgrade since 2017.

The agency said it made the decision because the Covid-19 pandemic and exposure to Russia’s invasion of Ukraine have both demonstrated that Ireland’s economic resilience has increased.

“While there is still uncertainty about the ultimate macroeconomic impact stemming from the terms-of-trade shock caused by higher energy prices and other inputs to economic activity, the economy Ireland is well placed to absorb the negative impact of the conflict,” he said. .

“The impact of any international agreement on corporate tax reform also appears manageable. Ireland’s size and openness make it more vulnerable to shocks.”

“Nevertheless, Ireland’s doubling in size as measured by GDP over the last ten years, its strong track record of growth and growth potential, and its competitiveness help to mitigate these vulnerabilities.”

He also said Ireland’s public debt has fallen amid robust economic growth.

Moody’s said it expects this decline to continue in coming years.

“Strong economic growth and improving fiscal fundamentals – including six years of primary surpluses – put Irish debt ratios firmly on a declining path in the years leading up to the pandemic,” Moody’s said.

“While the government has provided substantial support to the national economy, this has only had a very marginal impact on the debt ratio due to the underlying resilience of the economy and the favorable performance tax revenue.”

“This means that the pandemic has not delayed the process of reducing debt ratios and improving the resilience of the government’s balance sheet.”

He added that he expects further fiscal improvement, with a reduced budget deficit this year and a return to surplus in 2023, as temporary pandemic support measures are withdrawn and strong economic activity boosts stocks. tax revenues.

Moody’s also maintained Ireland’s short-term rating at the highest level of P-1.

“This is a strong endorsement of the resilience of the Irish economy,” said Frank O’Connor, director of finance and debt management at the National Treasury Management Agency.

“This is the third upgrade by a major rating agency in recent months, following upgrades from DBRS Morningstar and Fitch earlier in the year.”

“This pattern of upgrades adds to the existing positive sentiment among investors towards Irish sovereign debt, which strengthens our ability to attract more investors and increase the liquidity of our issues.”