The European Commission has put Irish economic growth at 7.3% for 2017 as the economy expanded at a "solid pace", supported mainly by domestic activity. 

This is up from 4.8% rate of growth predicted in the Commission's Autumn Economic Forecast and marks the fastest growth rate in the EU for 2017.

In its Winter Economic Forecast, the Commission said the Irish economy performed better than expected in the third quarter of last year as headline figures were driven up by the activities of multinational companies here.

It said that underlying domestic activity, which excludes some of the impact of multinationals, grew "robustly" by 4.9% in the first three quarters of 2017. 

"GDP is estimated to have grown by 7.3% in 2017 and growth is expected to moderate to 4.4% in 2018 and 3.1% in 2019", the Commission added in its latest commentary. 

The Commission also said that consumer spending and construction investment are forecast to drive GDP growth here in the short term.

It also noted that strong employment growth, particularly for full-time jobs, should underpin a rise in disposable income and household consumption over the next two years. 

But it cautioned that the country's trade figures remain heavily influenced by the activities of multinationals and are subject to "high uncertainty". 

"In 2018 and 2019, discounting for further volatility in contract manufacturing and imports of intellectual property services, exports are expected to increase in line with global trade and imports in line with strong consumer demand," the Commission said.

The Commission, the EU's executive arm, also said that Irish inflation remains subdued and is forecast to pick up only gradually. 

Looking ahead, the Commission said that risks to the economic outlook are still mainly linked to the outcome of the negotiations between the UK and the EU, and potential changes to the international taxation environment.

The European Commission today also raised its growth projections for the euro zone, more confident than ever that the solid economic recovery in Europe will endure through 2019.