Ireland has been ranked the most charitable country in Europe and the second most charitable nation in the world, according to a new survey.

The World Giving Index, compiled by the Charities Aid Foundation (CAF), showed 75 per cent of Irish people donated money to charity while 38 per cent volunteered their time each month.

Ireland also had the highest percentage of residents who said they had "helped a stranger" the previous month, at 65 per cent.

Last year, Ireland was in third place internationally in the index.

The study showed a 3 per cent increase in volunteering amongst the Irish population this year.

The report was compiled using Gallup polling information on the charitable behaviour of people in 153 nations and used three measures. These were "giving money", "volunteering time" and "helping a stranger".

The survey ranked the US as the most charitable country followed by Ireland, Australia, New Zealand and the UK.

Thailand was the highest ranked country for "giving money" while Turkmenistan had the highest percentage of its population that volunteer time and Liberia came out top when it comes to "helping a stranger".

“It is a great honour that Ireland’s ranking in the World Giving Index has risen to second place in the world and first place in Europe. It reveals that, in the context of economic catastrophe, our most precious natural resource – the instinct to give to others – is so strong," said Yvonne McKenna, chief executive of Volunteer Ireland.

“Individually and collectively, 2011 has been another incredibly difficult year for many, many people in Ireland. As we near its end, however, the results of the World Giving Index survey provide a different narrative to our story, one that highlights we are first and foremost a society, not just an economy," she added.

The index showed a 3 per cent increase in the number of Irish people giving time to volunteer and a 5 per cent rise in those giving time to help a stranger.

The study also indicated that women in Ireland are more generous than Irish men when it comes to donating money but that men tend to volunteer more of their time.

The latest index suggests the world has become a more charitable place over the last 12 months with a 2 per cent increase in the global population saying they helped a stranger and a 1 per cent increase in volunteering time.

CAF attributed the 1 per cent overall decline in the numbers of people giving money to charity to the current global economic crisis.