Ireland's domestic economy is expected to grow by 2.7% this year, according to a forecast by audit and advisory firm EY.
The organisation expects inflation to be 3.1% on average this year after it rose sharply to reach 3.6% in March, following surging energy prices caused by the Iran war.
EY said the number of people employed in Ireland will grow by 1.8% this year.
It said spending by households will remain strong in 2026 and rise by 2% helped by the healthy jobs market and rising wages.
EY's chief economist Dr Loretta O’Sullivan said: "Consumer spending is a key indicator of the health of the domestic economy and even with the significant energy price impact we are still forecasting this to increase this year and next."
She added that Ireland navigated US tariffs well last year and the challenge this year will be to manage exposure to rising energy prices.
"We are projecting more moderate but still decent growth this year, something many of our peer nations will not be expecting," she added.
Meanwhile, EY said the Irish jobs jobs market is expected to grow and consumer spending is expected to continue.
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It said employment growth would ease in 2026 and 2027, reflecting "more cautious hiring intentions" but unemployment would remain low by historical standards at 5% in 2027.
Asked about how far the Government should go in supporting households on energy costs, Dr O'Sullivan said that, from an economic viewpoint, she "would point to supports being targeted and supports being temporary".
Speaking on RTÉ's Morning Ireland programme, she said the Irish economy is resilient due to budget surpluses and low unemployment.
However, to "be best placed to continue the strength and resilience in the economy" and to cope with geopolitical shocks, Ireland should "wean itself off fosil fuels", improve market diversification and boost infrastructure.
The Northern Ireland economy is also forecast to grow this year and next, at a slower rate than south of the border, with jobs expected to grow at 0.6% for 2026 and 2027.
"Northern Ireland's economy continues to show resilience, but growth is increasingly constrained by global volatility, impacting costs, confidence and investment decisions," said Rob Heron, managing partner at EY Northern Ireland.
"Understanding how global tensions, trade arrangements and policy choices affect local businesses is becoming more important for business leaders and policymakers in Northern Ireland as they plan for the future," he added.
EY Ireland head of markets Carol Murphy said: "In today's volatile environment, businesses are navigating conflict on three interlinked fronts, with military, economic and technological challenges directly shaping commercial and strategic decisions".
"For organisations, geopolitics is no longer an intangible risk, it's directly influencing strategy, supply chains, investment, talent and resilience in real time," she said.
"For leadership teams, the challenge is less about predicting what happens next and more about building the agility and capability to act when conditions change," she said.
"For policymakers, building resilience across the economy will be central to helping Ireland navigate today's uncertainty and remain an attractive and trusted place to invest, innovate and do business," she added.
