A report by the Economic and Social Research Institute has said the outlook for the Irish economy is improving following a steady recovery in the international economy.
In its winter economic commentary the ESRI predicts that growth will accelerate to 3.5% during the next twelve months, and that inflation will fall to below 2% over the next two months.
It says this will provide a good backdrop for new social partnership wage negotiations due to start in the spring.
The ESRI says that the recovery will result in a pick-up in world trade in 2004, which is expected to be substantial.
The economic rebound here will continue into next year with growth accelerating from 2.5% this year to 3.5%, although the Institute notes that this will still below potential.
The commentary warns that further strengthening of the euro and higher inflation here than elsewhere means competitiveness pressures will remain
Inflation, it says, will fall to 2% or lower over the next two months and this will provide a favourable backdrop for renewed social partnership pay negotiations in the Spring.
In contrast to other EU states its says Ireland should have no problem adhering to the discipline of Europe's stability and growth pact.
