The latest quarterly economic review from the employers' group IBEC has predicted that economic growth will drop back next year.
It expects growth in gross national product, which excludes profits from foreign multinationals, to reach close to 5%, before falling to 4.5% in 2005.
IBEC says that while some sections of the Irish economy, such as housing, are booming, others are performing only modestly.
It says manufacturing growth is likely to remain 'unspectacular' while consumer spending growth is weak.
IBEC expects an Exchequer borrowing requirement of €1.2 billion this year, down from the €2.8 billion projected at budget time, but it warns against a loosening of the Government's purse strings, and against excessive wage demands.
On inflation, the employers' group says that if oil prices remain above $50 a barrel, this will add half a point to the inflation rate. It expects this rate to be 3% by the end of the year before falling back as 2005 progresses.
