DUBLIN- Standard & Poor’s on Friday revised up Ireland’s sovereign credit rating to ‘A-’ with a positive outlook from its previous ‘BBB+’ assessment, citing the eurozone member’s improved domestic prospects. In contrast, the ratings agency held Italy’s credit rating at ‘BBB’, which is two notches above junk level, and maintained its negative outlook. “The (Irish) upgrade reflects our view of the brightening prospects for Ireland’s domestic economy, which we expect to underpin further improvements in the government’s financial profile, capital markets access, and financial system asset quality,” S&P said in a statement.

The agency also ramped up its 2014-2016 average gross domestic product (GDP) growth projections for Ireland to 2.7 percent from 2.0 percent previously.

“We believe the domestic recovery is broadening and has gathered pace in the first quarter of 2014,” S&P added.

“Full-time employment grew by 2.3 percent from the 2013 March quarter to the 2014 March quarter, with the unemployment rate estimated to have declined to 11.8 percent in May 2014, the lowest since April 2009.”

The move was welcomed by Irish Finance Minister Michael Noonan, who said he was “confident that we are moving in the right direction.”

“This upgrade to A- is a very positive development (and) will further drive down bond yields and attract further investment in Ireland,” he added.

S&P was encouraged by the economic and financial progress being made in Ireland, which exited a tough three-year EU-IMF bailout programme in December 2013.

Ireland’s net general government debt was forecast to peak at 127 percent of GDP in 2013, and to fall to 112 percent by 2017.

“We also link our expectation of improving budgetary performance to strengthening domestic economic conditions, as well as Ireland’s track record of meeting its stated fiscal goals since entering into an EU-IMF programme in 2011,” S&P said.