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We'll need a second bailout, says ratings firm

STEADY as she goes but we're going to need a second bailout. That was the view from ratings agency Moody's today as it praised Ireland's effort, but at the same time warned about the future.



Moody's said the country will need more bailout funds when the current programme ends next year.

It comes as families bracing themselves for a €3.5bn Budget adjustment have been assured the hit will not be any worse than feared.



Healthier

The Government will not have to take even more money out of the economy as our finances are healthier than expected, new data shows.

It raised its growth estimate for the economy for this year from 0.7pc of Gross Domestic Product to 0.9pc.

More good news came when two ratings agencies gave positive assessments of the economy, saying the country is now less of a risk for investors.

While leaving its BBB+ grade for Ireland unchanged, Fitch said the outlook for the national finances had improved from negative to stable. Rival firm Moody's earlier issued a mainly supportive assessment of the Government's efforts to tackle the deficit.

Fitch said the risks surrounding the Irish financial adjustment path have "narrowed and become more balanced".

While Moody's did not upgrade Ireland's debt ranking, it was also positive about the way in which the financial crisis has been handled.

The agency kept its 'Ba1' credit rating for the country unchanged when it published an annual report on the state finances.

Ireland was the first bailed-out euro country to make a successful return to borrowing on financial markets.

The recent move enabled the country to knock around €10bn off its EU/ECB/IMF bailout requirements.

But Moody's believes Ireland might still need more precautionary loans. "Ireland has made preliminary steps in an attempt to return to markets on a sustained basis, from which it had been excluded since October 2010," it said in its annual credit report on Ireland.

comurphy@herald.ie


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