Moody's sees gradual fall in Irish creditworthiness

DUBLIN (Reuters) - Moody's does not expect to follow its downgrade of Ireland's AAA rating to Aa1 with further cuts in the short term as it projects a gradual decline in Ireland's creditworthiness, a senior Moody's official said on Thursday.

Moody's is the last of the three main agencies to strip Ireland of its top credit rating. Standard & Poor's has already cut its rating twice this year and Fitch has moved down by one notch.

"I see the likelihood of a further gradual deterioration of Irish creditworthiness linked to debt affordability, debt financeability and debt reversibility," Dietmar Hornung, senior analyst at Moody's, told Reuters in an interview.

"But at this juncture I don't see imminent issues that would force us to change the rating in the short term," Hornung said.

Moody's broadly agrees with the direction of the fiscal measures taken by the Irish government but it would like to see more spending cuts implemented, he said.

"For sure we'd be pleased by more cuts on current expenditures," Hornung said. "Particularly expenditures on civil servants, which has seen a significant increase since earlier this decade.

"Our understanding is the authorities are aware of this issue and there are efforts to tackle this going forward."

(Reporting by Andras Gergely; Editing by Carmel Crimmins)