Stockbroker Davy has raised its outlook for the country's economic growth for this year and next.

Davy is forecasting GDP growth of 5.7% this year on the back of stronger export performance and higher consumer spending. It had previously forecast growth of 3.8% for 2018.

The stockbrokers have also pencilled in growth of 4.5% for 2019.

These forecasts are higher than those of the Central Bank (4.8% and 4.2% in 2018 and 2019 respectively) and the Department of Finance (5.6% and 4%). 

Davy has predicted that consumer spending will grow by 3.2% in 2018 and 3% in 2019, while the level of employment will grow by 2.7% this year and 2.5% next year.

This will result in the unemployment rate falling to 4.7% by 2019.

In today's report, Davy said another "giveaway" Budget is also likely in 2019 and so public spending will add to demand both this year and next. 

While homebuilding is forecast to grow by 23% in 2018 and 20% in 2019, it will still be a fraction of the natural demographic demand of 35,000 homes a year. 

But the stockbrokers added that as housing transactions rise towards 60,000 in 2018, it expects that the stock of mortgage lending will finally stabilise after a decade of de-leveraging.

While Davy believes that the economy still faces uncertainties from Brexit, the stockbrokers pointed out that consumer confidence surveys remain close to historic highs and the Bank of Ireland's Business Pulse survey rose to its strongest level in March since the Brexit referendum in 2016. 

"Notably, new SME lending rose to €1.5 billion in Q4 2017 - its highest level so far in this recovery. Similarly, total corporate lending grew by 0.5% in the year to February - the first positive growth in almost a decade," Davy stated. 

"So there is little sign of a material impact on sentiment from Brexit," it added.