Ratings agency Moody's has upgraded the country's sovereign credit rating to A2 after faster than expected economic growth and progress by the Government in balancing its books. 

Ireland has posted the fastest growth in the European Union for the past three years and the Government has said it is on target to eliminate its structural budget deficit next year. 

Moody's raised Ireland's credit rating to 'A3' last May, giving the country 'A' ratings from all the major ratings agencies. 

Moody's also changed the outlook on Ireland's rating to stable from positive. 

"When Moody's upgraded Ireland's rating to A3, it conditioned a further upgrade of the rating on a continuation of the positive economic, fiscal and debt trends as well as a continuation of the improving metrics in the banking sector," Moody's said.

"All of these conditions have been met," it added.