Bank of Ireland economist Dr Dan McLaughlin is forecasting that gross domestic product will grow by 6.5% this year, with gross national product expanding by 4%.
In the outlook for 2003 from the bank's treasury and international banking division, he predicts that the average inflation rate will ease from 4.6% to 4.3%, but unemployment will climb from an estimated 4.5% in 2002 to 5%.
Dr McLaughlin is expecting an Exchequer deficit of €1.7 billion in 2003, but he warns that these forecasts are based on an early resolution of the Iraqi conflict.
He says the global economic environment is crucial, as exports are very large relative to domestic demand and can have a huge influence on recorded growth rates.
The economist says monetary policy is supportive of good growth, with further ECB rate cuts on the horizon, though personal spending will grow by a more subdued 2.75% in 2003.
He adds that Government spending will not be as positive an influence as last year, but business spending is expected to accelerate.
