Standard & Poor's has raised Ireland's credit rating one notch to A+, citing the country's strong growth and debt reduction.

"The upgrade reflects our view of Ireland's improved fiscal performance, higher state asset sales, and robust economic performance, which have combined to lead to a quicker decline in net general government debt than we had previously forecast," the agency said.

It said it expected real GDP growth of 3.6% until 2018 with exports, employment and debt costs all moving in the right direction.

S&P put a stable outlook on Ireland’s credit rating, saying it could raise it again if the budget returns to a sustained fiscal surplus earlier than expected or if net general government debt fell at a faster rate than anticipated.

It said it could lower the rating if external events or policy shifts undermine the country’s growth prospects, or if the government embarked on an “overly expansionary fiscal policy”.

The National Treasury Management Agency has welcomed the S&P move, saying it would have a “positive impact on investor sentiment towards Ireland and broaden the universe of buyers for Irish Government bonds”.

The Minister for Finance also welcomed the decision, saying it recognised the country’s “commitment to restoring the public finances to full health and the significant progress made to date in this regard”.