A survey which measures how consumers feel about the economic outlook has shown an improvement in December.
The Consumer Sentiment Index, compiled by KBC Bank and the ESRI, was 50.2 in December, compared with 44.8 in November.
The December figure was the highest since April 2008.
The index dropped to an all-time low of 39.6 in July.
David Duffy of the ESRI said interest rate cuts and pre-Christmas sales, as well as lower inflation, had improved consumers' perception of their financial situation.
But Mr Duffy warned that people remained pessimistic about the economy and the outlook for jobs.
KBC Bank economist Austin Hughes said a 'painful squeeze' on spending power was now being reversed by dramatic interest rate cuts and lower oil prices.
