Last year economic growth hit 7%, according to Bank of Ireland. It expects gross national product (GNP), which excludes the contribution from foreign multinationals, to be 6.2% this year and 5.2% in 2008.
The bank's chief economist Dan McLaughlin has described the forecasts for growth contained in the National Development Plan as 'very conservative'.
In his quarterly economic outlook, the economist said GNP was now outstripping GDP, which includes profits from multinationals, as the former measure included increasing amounts earned from Irish assets abroad.
Dr McLaughlin said half of last year's growth was down to consumer spending, but there did not seem to be an SSIA effect on spending yet. He said the SSIA effect could materialise this year, supporting spending in the face of high inflation and rising interest rates.
He predicted that inflation in 2007 would average 3.8%, and ECB interest rates would climb to at least 3.75%, with a risk of 4% being hit.
