Will Moody's, a credit ratings agency, raise Ireland's sovereign debt status from that of junk bond to investment grade? Moody's decision will be announced later today when the US company publishes its review of the country's economic prospects. A credit upgrade will bring the agency into line with its peers – Standard & Poor's and Fitch – which have already restored Ireland to investment grade. Moody's verdict does matter. An upgrade would mean a bigger market for the sale of Irish sovereign bonds, and so help to lower borrowing costs. At present, many investment and pension funds cannot buy sub-investment grade debt.

Already this month, the National Treasury Management Agency (NTMA) has raised €3.75 billion in borrowings at a competitive price, or yield, of 3.54 per cent for long term debt. Moody's downgraded Ireland's debt in 2011, at a time when bond yields had soared to over 14 per cent. And since then, the agency has taken a largely negative view of Ireland's economic prospects, questioning whether Ireland would return to financial markets at the end of the bailout period in December.

Certainly a positive decision by Moody’s would help to enhance Ireland’s economic reputation, at a time when the domestic and global economies show signs of positive momentum. The December unemployment rate, which dropped to 12.4 per cent – its lowest level in five years – has been accompanied by a rapid increase in employment numbers.

Recent IMF forecasts for global growth in 2014 show the world economy expanding by 3.6 per cent, with the euro zone economies also expected to improve. An improving outlook in the United States has helped to improve confidence in the global economy and markets have been encouraged by indications that the Federal Reserve will move cautiously in reducing its asset purchases. Ireland remains reliant on an export-led recovery for sustainable growth, which greatly depends on economic conditions in the major developed economies.