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Moody's cuts Ireland's credit rating

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Moody's cuts Ireland's credit rating

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Moody’s has cut Ireland’s credit rating saying the country faces a slow climb out of recession as the cost of rescuing its banks mounts, following fresh rounds of bad news from the banking sector.

The one-notch downgrade to Aa2 with a stable outlook came a day ahead of Dublin’s regular monthly sale of debt in which it will try to raise up to 1.5 billion euros.

Standard and Poor’s and Fitch had already downgraded Ireland to AA and AA- respectively.

It has a budget deficit of 14 percent of gross domestic product, the highest in Europe, which economist predicted will go higher.

The IMF last week said Dublin would not meet an EU agreed deadline to reduce its budget deficit to three percent of GDP by 2014.