The Government has made “strong progress” in stabilising the public finances and the economic outlook is brighter, but numerous risks remain, according to Standard & Poor’s.

In its latest verdict on the economy, the ratings agency maintains its BBB+ long-term rating on Irish sovereign debt and said the outlook was still negative.

Headwinds facing the Government include high deficits, high debt levels and the challenge of complying with the bailout programme.

The agency believes that the economic outlook is improving but warns that a reliance on exports for recovery carries “significant downside risks”.

It notes, however, that exports in areas such as pharmaceuticals and technology have been supported by gains in competitiveness.

The agency judges that the economy grew by 0.4 per cent last year in GDP terms and expects a further increase of 1.4 per cent this year

S&P lists fiscal consolidation, private sector deleveraging and weak markets for investment, labour and property as factors that will continue to weigh on growth. SP has also maintained its A-2 rating on Irish short-term debt.