DBRS says risks to Ireland’s economy balance against growth outlook

Ratings agency DBRS Morningstar said the pandemic had created supply chain disruptions and capacity issues in some sectors of the economy that have increased price pressure in Ireland and across Europe.

“This supply shock was particularly acute in Ireland’s property market, where demand for new housing completions remains strong,” the agency said, as it retained the State’s AA rating and stable outlook.

It said the stable trend reflected its view that the ongoing external risks to Ireland are balanced against the economy’s favourable growth outlook.

DBRS said the main long-term risk to Ireland’s economic growth was that global tax reform affected future foreign direct investment.

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“Yet, DBRS Morningstar is of the view that co-ordinated execution around global tax reforms will be difficult to implement,” it said, adding, “Ireland has significant advantages that keep its economy competitive should reforms threaten the country’s economic model.”