- Ireland’s AA1 government ratings facing its most severe test in decades
- Government has been proactive to the extent possible in their effort to stem the deterioration in financial strength
- Expects Irish economy to contract at a high single-digit rate in 2009, followed by smaller decline next year
- Irish unemployment likely to peak only in 2010
- Outlook on Ireland negative as country not as diversified as larger economies, more exposed to external risks
- Negative outlook also reflects risk of financial deterioration, citing share of government revenue used for interest payments and cost of new debt
Doesn’t make very palatable reading and will be weighing a little on EUR/USD, which is presently at 1.4550.
