The biggest threats to the country's economic recovery are now political - both local and European - according to Friends First economist Jim Power.

In Friends First's latest economic outlook, Mr Power says that political stability has been a key factor in selling Ireland to international investors in recent years.

But this is now under threat as there is no guarantee that a stable government can be formed after a general election due to the growing proliferation of independents, he warns.

"The Irish electorate needs to be very careful not to undermine the progress that has been made in very difficult circumstances since the economy crashed," the economist said.

He also said that the future of Britain in the European Union is an issue that will have to be carefully monitored, because of the significant implications for Ireland if they left the bloc.

Friends First's economic outlook says that the Irish economy has entered 2015 with strong momentum, with all the economic indicators suggesting that the recovery is now robust. 

It predicts GDP growth of 4.5% this year, while GNP growth is pencilled in at 4%. The country is set to be the strongest growing economy in Europe this year. 

It also notes that total employment in the economy continues to improve and has increased by 87,700 since the first quarter of 2011. Unemployment has fallen to 9.8% from a high of 15.1% at the start of 2012.

Consumer spending, while still "fragile" is also showing signs of improvement.

On the housing market, Friends First says that it is important that demand and supply side measures are implemented early in the recovery cycle in order to prevent "economically dangerous price trends from developing".

Mr Power said that recent measures on mortgage borrowings by the Central Bank "make sense". He said that restricting the amount of money that borrowers can access should take some heat out of property prices, especially in Dublin.