RTTNews - Speaking at an event in Dublin, Noble Prize-winning economist Paul Krugman reportedly said the Irish economy will take nearly five years to recover. He expects the economy to undergo a slow and prolonged recession.

However, Krugman ruled out the possibility of Ireland defaulting on debt.

Elsewhere, the Irish central bank governor John Hurley said the year 2009 will be very difficult in general. In an interview to the Irish broadcaster RTÉ News, Hurley, who is also a European Central Bank Governing Council member, said the recovery in the region will take time and will be gradual. He expects to witness the benefits of recovery next year.

Adding to the bleak picture for Ireland, rating agency Moody's downgraded the ratings of the Anglo Irish Bank on Thursday. Further, the agency placed on review for downgrade, ratings of other Irish banks.

The rating agency noted that its review will look at the extent to which Ireland's ability to provide support to its banking system may be impacted by the weakening of the government's own debt capacity (which is under review for possible downgrade) as a result of the ongoing global economic and credit crisis.

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