The Organisation for Economic Co-operation and Development has said the global economic outlook is bright for this year and next year.
'The current economic situation is in many ways better than what we have experienced in years,' said OECD chief economist Jean-Philippe Cotis in the group's twice-yearly report on the global economy.
On Ireland, the report predicts growth of 5.5% this year, slowing to 4.1% in 2008 as consumer spending weakens and housing activity falls. 'The housing boom is over,' the report says.
It urges the Government to avoid excessive increases in spending, and calls for reforms in areas such as the electricity and gas markets.
The OECD report says a smooth landing of the US economy is being balanced by stronger growth in Japan and especially Europe, with emerging markets such as China and India also making sizeable contributions.
Overall economic growth among the 30-member OECD should come to 2.7% in both 2007 and 2008, the report estimated, down from 3.2% last year.
A potential risk to the upbeat scenario, however, was housing, since the share of housing investment in overall growth had reached a 10-year high in half of all OECD countries and appeared set to fall back a bit.
In the US in particular, 'the housing sector has cooled somewhat more than expected,' Cotis said.
The report predicted growth of 2.7% in the euro zone this year, but warned that higher interest rates might be needed to keep inflation down.
It said the US economy appeared set for a soft landing, but warned that the troubled sub-prime mortgage sector still posed a major risk. The OECD said that to date, the decline in the US housing market had not significantly affected the economy as a whole, which was forecast to grow by 2.1% this year and 2.5% in 2008.
