Employers' group IBEC has said the Irish economy could grow by around 5% over the next few years, provided domestic policies are sound and global economic conditions remain good.
In its quarterly economic report, chief economist David Croughan estimated that gross national product grew by around 5% last year, but warned that this was likely to drop back to 4.5% this year, before rebounding to 5% in 2006.
Mr Croughan said global economic growth would be slower this year because of the effect of oil prices and an easing in the pace of US growth.
He said the impetus for Irish growth would come from stronger consumer spending - which had underperformed over the last couple of years - and continued strong expansion in the service sector. This would offset a slowdown in residential construction.
The economist pointed to some risks, saying wage rates were running well ahead of the euro zone average, while service sector inflation was creeping back up.
