Ratings agency DBRS has upgraded Ireland’s credit rating to A (high), and revised its outlook for the country from stable to positive.

The upgrade reflects the agency’s assessment that the outlook for public debt sustainability in Ireland has materially improved.

“This is due to a strong economic recovery, and progress reducing the fiscal deficit,” DBRS said, adding that public debt ratios are now expected to trend downwards at a more rapid pace than previously anticipated.

DBRS said Ireland’s strengthened credit profile warrants the upgrade even as the UK referendum on European Union membership on June 23rd presents some downside risk to the growth outlook.

It also said the inconclusive election is unlikely to alter the fiscal outlook.

“Although the results raise the likelihood of a hung parliament or the formation of a weak coalition, all major parties, including Sinn Féin, have promised to respect Ireland’s budget rules under the Stability and Growth Pact.”

The agency said the ratings are underpinned by Ireland’s openness to trade and investment, young and educated workforce, flexible labour market, and access to the European market, all of which support the economy’s competitiveness and solid medium-term growth prospects.

However, it said these strengths are countered by several credit weaknesses, including high public debt, medium-term fiscal pressures, heavily indebted households and asset quality concerns in the banking system.