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Moody's warns Dublin over upcoming Budget giveaways

By Colm Kelpie

The Republic's government should focus on slashing debt further rather than having giveaways in the Budget, ratings giant Moody's has warned.

Just days after the agency disappointed by refusing to upgrade Ireland's rating into the 'A' bracket, a senior analyst at Moody's cautioned that there was no need for an expansionary Budget next month.

The agency has listed the Irish Government's plan to ease up in the Budget, and the uncertainty posed by next year's election, among the reasons for not upgrading Ireland to the coveted 'A' rating category.

Moody's analyst Kathrin Muehlbronner said the Irish economy was not in need of stimulus, and suggested the extra revenue should be used to pay down debt.

"The Irish economy is in a very sweet spot right now. If you have a very open, volatile economy, you should have bigger buffers if you want to shield yourself. Higher buffers equals lower debt," she said. But Tanaiste Joan Burton said the Irish Government's pledge that next month's Budget will be "sensible".

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