Davy Stockbrokers has upgraded its growth forecast for the Irish economy this year from 3.1% to 3.8%.
Economists Robbie Kelleher and Rossa White say business and consumer confidence have improved, and have increased their consumer demand forecast from 3% to 3.5%.
They say spending will be helped by low interest rates and a sharper than expected fall in the inflation rate to an average of 1.8%.
The Davy report says the public finances are also in better shape, boosted by capital gains tax. While the report is not moving away from official forecasts, it says a better Budget outcome than forecast is more likely.
The economists say higher growth rates in the UK and US should help sustain a recovery in exports.
But they still forecast an unemployment rate of 6% and a moderation in housing activity.
