The Central Bank has revised upwards its forecast for economic growth this year.

The more positive outlook comes as the bank says surging job creation is bringing Ireland back within sight of full employment.

In its latest quarterly bulletin, the Central Bank predicts overall economic output or GDP will rise by 4.4% in 2018.

That is half a percentage point higher than its previous forecast in October last year.

The bank said the upgrade is due to a more favourable international outlook. The IMF recently upgraded its forecast for global growth in both 2018 and 2019.

The Central Bank sees Ireland benefiting from improved export performance due to higher than expected demand from its trading partners.

At home, growth is underpinned by domestic demand based on rising employment levels and steady increase in consumer spending.

The bank predicts an additional 89,000 people will be hired here over the next two years. That would bring employment to 2.3 million, past the peak in 2007.

"The recovery has been an income and not a credit or asset-driven phenomenon," it said.

The quarterly bulletin identifies a number of risks on the horizon.

The Central Bank says Brexit will have a "negative and material impact" on the Irish economy, the severity of which will depend on the terms on which the UK exits the EU.

It also warns of uncertainty in the "international taxation environment" given Ireland's dependence on investment and corporation tax receipts from a relatively small number of multinational corporations with a significant presence here.