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Moody's cuts Ireland's credit rating

(Agencies)
Updated: 2011-04-15 16:13

DUBLIN - Moody's has cut Ireland's credit rating to Baa3, one level above junk, and says the nation could struggle to cut its deficit because of weak economic growth.

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Moody's issued its latest downgrade hours ahead of the Irish government's announcement of a revised agreement with the European Commission, European Central Bank and International Monetary Fund on terms of Ireland's November bailout deal.

Moody's said Friday it was lowering its rating on Ireland two notches from Baa1 because the Irish economy appears unlikely to grow much, if at all, in 2011 while private credit needed to stimulate growth remains weak.

The agency said lower growth would make it harder for the government to slash its deficit without imposing even tougher spending cuts than already envisaged.