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Moody's: Brexit, US Tax Reform Challenges To Ireland

Thursday, May 18, 2017

Ratings agency Moody's has said that the negative impact of Brexit and US corporate tax reforms pose key challenges to the Irish economy.

In a new report, Moody's said that Ireland's economy and public finances have been on an improving trend, which will likely continue over the coming years.

However, Moody's said that risks to this generally positive outlook come mainly from the effects of the UK's withdrawal from the EU.

Kathrin Muehlbronner, a Senior Vice President at Moody's, explained: "Ireland will likely draw some benefits in the form of stronger foreign direct investment as firms move operations away from the UK but overall we believe that the economic impact of Brexit will be bad for Ireland."

Muehlbronner added that the corporate tax reforms currently under discussion in the US could represent a negative development for Ireland. She noted that "around half of all foreign direct investment originates from the US and Ireland's low corporate tax rate has been a key driver – albeit not the only one – for the large presence of multinationals."

The Trump administration has proposed slashing the US corporate tax rate from 35 percent to 15 percent.