Ireland downgraded

Ratings
agency Moody’s has downgraded the Irish Republic’s sovereign bond rating to Aa2
from Aa1.

The
ratings agency said the move had been driven by the government’s gradual but
significant loss of financial strength.

And
it expects the country’s economic growth to be below its historical trend in
the next three to five years.

In
June, it was revealed the Irish Republic had officially moved out of recession
in the first quarter of 2010.

Ireland
has suffered a severe contraction in GDP since 2008, causing a sharp decline in
tax revenue.

And
Moody’s said the banking and property sectors, which had driven the economy
before the global economic downturn, would not contribute strongly to overall
growth in coming years.

It
also pointed to the country’s swelling levels of debt as a reason for the
downgrade.

“This downgrade
is primarily driven by the Irish government’s gradual but significant loss of
financial strength, as reflected by its deteriorating debt affordability,”
Dietmar Hornung, Moody’s senior credit officer and lead analyst for Ireland,
said in a

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