Belfast Telegraph

Republic to 'shake off' gloom of Brexit: ratings agency

By Colm Kelpie

The Irish economy will be able to brush aside the uncertainty posed by the Brexit vote, Moody's has said.

The ratings giant said the Republic would continue to outperform other European countries, forecasting the economy would increase by 3.4% this year and 3.1% in 2017.

That's more conservative than the predictions from the Republic's Department of Finance, but Moody's remains upbeat about the prospects for the Irish economy.

"Although the UK's June 2016 vote to leave the European Union leaves Ireland's economy exposed, Moody's believes that the uncertainty created by the vote is manageable for Ireland over the outlook period," Moody's said, in a note to investors.

It also said that the Irish economy would likely perform strongly over the next two to three years.

The impact of the referendum result has already dented the Irish exporting sector due to the dramatic weakness in sterling - conversely giving a boost to Northern Ireland exporters. The Ulster Bank purchasing managers' index (PMI) for October said exports from the province surged at their fastest rate in 12 years during the month. But apart from exports, private sector growth in Northern Ireland was weak.

Irish business body Ibec has warned that if the pound weakens further, it could translate into hundreds of millions of euro in losses in the food and drink sector in the Republic.

Moody's also maintained its positive outlook for Irish banks, but warned the large stock of bad loans remains a "critical issue".

It pointed out that problem loans for rated Irish banks were €41.5bn (£36bn) at the end of last year, down from €67bn (£58m) at end of 2014, and that they will fall further over the coming years.

Belfast Telegraph