March 1 (Reuters) - Credit ratings agency S&P Global on Friday raised Portugal's long-term foreign currency sovereign credit rating to "A-" from "BBB+", citing improvement in its external financial balance sheet and corresponding reduction in external liquidity risks.

S&P affirmed Portugal's outlook at "positive", reflecting its view that the country's external and government debt positions could improve further.

Caretaker Finance Minister Fernando Medina told Reuters earlier last month that Portugal's public debt should drop further to 95% of gross domestic product this year if the next government remains focused on avoiding a budget deficit.

Portugal will hold a snap election on March 10 following the resignation of Socialist Prime Minister Antonio Costa on Nov. 7 amid a corruption investigation.

"We believe that, following the upcoming general elections in March, the next government will continue to exercise fiscal discipline," S&P said.

The ratings agency said the upgrade also reflects its view of a further decline in the government debt-to-GDP ratio.

Portugal's debt ratio fell to 98.7% of GDP last year from over 112% in 2022, ending below the 100% mark for the first time since 2009 as it approaches the euro zone's average of 90.4%. (Reporting by Aatrayee Chatterjee and Sergio Goncalves; Editing by Shilpi Majumdar)