UPDATE 1-S&P upgrades Ireland's debt rating on strong growth and 'prudent' policies

policies@ (Adds details from S&P statement, Brexit background)

Nov 29 (Reuters) - S&P Global Ratings on Friday raised its sovereign credit rating for Ireland up a notch, citing what it described as prudent policies and strong growth.

The outlook on Ireland is stable, S&P said http://bit.ly/33xipsH, as it upgraded the country's long-term and short-term foreign and local currency credit ratings to 'AA-/A-1+' from 'A+/A-1'.

The ratings agency added that it expected the Irish economy to remain competitive despite external risks, including the possibility of a no-deal Brexit, which remains the biggest but diminishing risk to the economy.

Britain has agreed a divorce deal with the European Union, which British Prime Minister Boris Johnson hopes to win parliamentary approval for if he retains power after an election on Dec. 12. Ireland said earlier this month it expected a delay to Britain's scheduled departure to boost the Irish economy.

The ratings agency also said that Ireland will continue to be vulnerable to any fresh rounds of protectionist trade policy, including out of the United States.

The Irish government has accumulated substantial fiscal buffers to offset those external risks, S&P noted.

Growth and employment in the Irish economy are the strongest among the developed world, the agency said, adding that despite recent moderation in growth, the country's flexible labour and product markets and its buoyant net immigration have helped keep its growth higher than the Eurozone average.

Fitch Ratings had affirmed its 'A+' rating on Ireland earlier in November. (Reporting by Kanishka Singh and Sathvik N in Bengaluru; Editing by Sandra Maler and Rosalba O'Brien)