On February 14, investment rating service Moody’s affirmed the wisdom of investing in Ireland’s public debt. As a company that advises investors about the wisdom of purchasing various investment vehicles, Moody’s is a deeply influential company. Whenever Moody’s releases a report like this, investors of all stripes are bound to take notice. Although there are several other well-respected investor rating agencies, Moody’s has long maintained its position near the top of the heap.
Besides publicly affirming Ireland’s current credit rating, Moody’s also stated their expectation that Ireland will remain fiscally solvent into the foreseeable future. Though Ireland has had ups and downs like any other nation, most commentators agree that democratic institutions in the Republic of Ireland are fairly strong. Undoubtedly, public and private investors will continue to approve of Ireland’s government structures. As events warrant, Moody’s will undoubtedly continue to update its forecast for Ireland.
In a recent statement, Moody’s emphasized how Ireland had improved how it gathers and publicizes financial metrics. In general, these reforms have emphasized greater transparency. Thanks to a host of fiscal reforms, the Irish economy is currently growing by leaps and bounds. Ireland’s very low business tax has done much to endear this country to a wide variety of multinational businesses. Over the course of the first three quarters of 2019, Ireland’s GDP growth soared to 5.9 percent.
In these uncertain times, international investors are increasingly drawn to conservative public debt instruments. As financial advisors continue to raise the alarm about a possible tech bubble, investors are seeking out European nations with the proven ability to effect reforms.
Ireland has certainly come a long way in the past few years. As recently as seven years ago, Ireland was widely seen as a country with an unsustainable debt-to-GDP ratio. By establishing tremendous growth trends, Ireland has managed to regain the trust of international investors. Though Moody’s recent Irish report was positive overall, it did contain a few warnings. According to Moody’s, Ireland’s rapid acquisition of foreign capital has led to some distortion in growth numbers. It remains to be seen if Ireland will address this issue in the near future. In the meantime, Ireland will provide a safe haven for sovereign wealth funds that invest in securitized debt.