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Country Risk Service Ireland 1st Quarter Product Image

Country Risk Service Ireland 1st Quarter

  • ID: 2138970
  • January 2014
  • Region: Ireland
  • 20 Pages
  • The Economist Intelligence Unit

The government took a risk in declining an EU precautionary credit line following the expiry of its EU/IMF loan programme in December 2013. But it currently has good access to global capital markets. Restructuring of the promissory notes used to bail out failed Irish banks in 2010 and maturity re-profiling of EU bail-out loans will help to improve Ireland's public-debt dynamics, although sustainability remains in question.

There is a risk of continued euro volatility given the patchy nature of the recovery in the euro area and monetary policy divergence between the European Central Bank (ECB) and the US Federal Reserve. A further risk is that one or more vulnerable countries leaves the euro zone, although this risk has fallen since mid-2012. In this scenario, it is unclear whether Ireland would remain part of a smaller group within economic and monetary union (EMU).

The central bank has deemed the three main banks adequately capitalised, but requested the largely privately owned Bank of Ireland to set aside EUR1.3bn in loan loss provisions. The number of residential mortgages in arrears for more than 90 days rose from 12.7% at end-June to 12.9% at end-September.

Country Risk Service Ireland 1st Quarter

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Sovereign risk
Current assessment
Rating outlook

Central scenario for 2014-18: Political stability

Central scenario for 2014-18: Election watch

Central scenario for 2014-18: International relations

Central scenario for 2014-18: Policy trends

Central scenario for 2014-18: Fiscal policy

Central scenario for 2014-18: Monetary policy

Central scenario for 2014-18: Economic growth

Central scenario for 2014-18: Inflation

Central scenario for 2014-18: Exchange rates

Central scenario for 2014-18: External sector

Key risk indicators

Ratings summary

Quarterly indicators

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Financial sector

Current account

Foreign payment and liquidity indicators

External trade

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