Ireland's economy as measured by GDP is set to grow by 4.8% this year as the rate of expansion moderates, a new report by consultant’s EY has predicted.
The analysis estimates that next year GDP will rise by a further 4.3%.
The research forecasts that the domestic economy will also grow reasonably strongly too, with Modified Domestic Demand expanding by 3.4% this year and 3% next year.
EY economists think inflation has now peaked and will come in at 5.8% this year as a whole, falling back to 2% by 2025.
Employment will continue to grow, rising by 2.8% this year despite the tight labour market but moderating back to growth of 1.5% next year.
"The dust is beginning to settle on the economic shocks triggered by the pandemic and the war in Ukraine and our Summer Economic Eye forecasts solid growth for Ireland over the coming years, albeit at a more moderate pace than the exceptional growth of recent years," said Dr Loretta O’Sullivan, EY Ireland Chief Economist
"Easing inflationary pressures should lend support to spending by households and firms, with further job creation also in prospect."
"Global uncertainty in the tech and other key sectors, together with tighter monetary policy, are generating some headwinds, but the waning of the energy price shock of last year is a tailwind for households and businesses alike."
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EY said Ireland's economy remains resilient and faces into the second half of 2023 and beyond from a position of real strength.
But it also said there are reasons for caution, with ECB interest rate decisions impacting the real economy with a delay, a tight labour market and the threat of underlying inflation remaining 'sticky'.
It also said maintaining competitiveness will be key.
