herald

Wednesday 17 January 2018

Investors backing us to bounce back

Investors backing us to bounce back

INVESTORS are betting on Ireland as the most likely of the euro area's bailed-out nations to grow itself out of trouble as Irish bonds deliver the best returns in the world.

Irish securities handed investors a 14pc gain in the past three months, the highest among 26 government debt markets.

Bondholders are betting the Irish economy will improve even further on it export-led recovery.

This sector pushed economic growth to the fastest rate in more than three years.

A survey of economists carried out by Bloomberg believes that the economy will probably expand by 0.5pc this year.



RESCUE

This is in contrast to its outlook for the Portuguese and Greek economies which it expects to contract by at least 1.9pc.

However, Irish 10-year yields slipped below 10pc this month for the first time since Portugal's April rescue.

The profit investors have made on Irish bonds compares with losses of 2.2pc on Portuguese securities and 1.5pc on Greek debt, according to the EFFAS indexes.

Ireland's funding costs are also declining relative to those of Germany, the euro area's largest economy, defying a surge in Greece's.

So far Ireland has resisted attempts from France to raise its corporate tax rate which, at about half the EU average, has lured major pharmaceutical and technological companies here.

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