The Organisation for Economic Cooperation and Development has predicted that the Irish economy will grow by 5% this year, rising to 5.5% in 2005 before easing below 5% in 2006.
In its twice-yearly report, the organisation said growth was being driven by buoyant exports and improving consumer spending, but it warned that the economy is vulnerable to a further strengthening of the euro or a rise in interest rates.
The Paris think-tank also said it expected inflationary pressures to build up again, and urged greater competition in the service sector and wage moderation to combat this.
'Growth should stabilise at around 5% per annum, as the Celtic Tiger era of double digit growth rates spurred by foreign direct investment belongs to the past,' the OECD said.
Meanwhile, the OECD said China, Japan and North America would pull the global economy forward over the next two years despite high oil prices and US deficits.
The OECD forecast economic growth of 2.9% in 2005 for its 30 member countries, not including China, down from 3.6%. But it said high oil prices and rise of the euro clouded the outlook, notably for Europe.
It said European growth was over-reliant on exports and high oil prices were not matched by high output growth and energy demand.
The OECD devoted a specific chapter to oil prices, which it warned were likely to remain at higher levels than in the past. 'Future oil prices will crucially depend on further progress in energy conservation in emerging economies as well as the US,' the report said.
Broken down by region, the OECD forecast the US economy would show growth of 3.6% this year and 2.9% in 2005, while the euro zone would post growth of 1.8% and 1.9%.
