New figures from the Central Statistics Office show a pick-up in economic activity in the three months from July to the end of September.
The CSO said that both measures of the economy's performance - gross domestic product and gross national product - were positive for the first time since the last quarter of 2007.
Gross domestic product - which includes profits from multi-national companies - rose by 0.5% compared with the second quarter, while gross national product - which many economists see as a better measure - increased by 1.1%.
The CSO said money earned by Irish-based companies abroad had a big influence on the GNP figures.
Exports rose by more than 3.5% in the quarter, but consumer spending and business investment dropped again.
The industrial sector of the economy expanded, however, despite another drop in construction output.
Finance Minister Brian Lenihan welcomed the figures, saying the economy had stabilised and was now on what he called an 'export-led growth path'.
He said his Budget day forecast of 1.7% growth for 2011 remained on track.
