Ireland is set to be the fastest growing economy in the EU for a second consecutive year in 2015, according to Goodbody Economics.
In a paper on the health of the economy, the stockbroking firm predicted that the 5% GDP growth in 2014 will be followed with a further 4% growth in the coming year.
"Ireland's recovery is a real and sustainable one," Goodbody stated.
It said that domestic demand, having returned to growth for the first time since 2007 last year, will be the key driver of growth in 2015.
Investment will be the key accelerator of this demand with a greater contribution from the consumer who is expected to bounce back in the coming years, today's report said.
The recovery in the construction sector is also expected to improve further as demand for housing and property price increases makes it a more attractive environment for development.
Goodbody said that strong growth in taxes contributed to another year of deficit reduction last year. The stockbrokers predict that the deficit will fall below 3% this year, but warn of clear spending pressures due to public sector pay talks and an upcoming general election.
"It is important that sensible fiscal policy is not abandoned, undoing the hard-won gains of recent years," Goodbody cautioned.
"With growth at a premium in the euro area, Ireland’s 5% GDP expansion in 2014 was nothing short of spectacular," Goodbody's chief economist Dermot O’Leary said.
"While we expect a moderation in the growth rate this year, our 4% GDP forecast still puts Ireland at the top of the growth table," he added.