THE economy bounced back to life in the third quarter, growing much faster than economists had thought.
Gross domestic product expanded 1.5pc between July and September compared with the previous three months, driven by a pick-up in domestic demand.
The strong growth figure beat expectations, with personal spending also increasing 0.9pc, signalling a return in confidence to consumers.
The figures reinforce the positive signals on employment and the recent Purchasing Managers' Indices, suggesting a tentative recovery.
Gross domestic product was also up 1.7pc year-on-year.
"For the first time in many quarters, we have a very strong contribution to GDP coming from domestic demand," said the CSO's Michael Connolly.
Analysts said the data showed the economy bouncing back in the third quarter.
Government spending increased by 1.1pc, while net exports declined by €233m in volume terms.
Industry, including building and construction, increased by 2.2pc. Public administration and defence decreased by 1pc and agriculture, forestry and fishing declined by 2.9pc between the second and third quarters of 2013.
On the output side of the accounts, gross value added in Other Services increased by 3pc, while industry jumped 2.8pc in the quarter, compared with the same three months in 2012.
Public administration and defence, however, fell by 3.8pc over the period, while agriculture, forestry, and fishing contracted 2pc. Personal expenditure fell by 1pc, compared with the same period last year, while government spending increased by 0.7pc and capital investment surged 8.3pc.
Net exports were €654m higher in the third quarter of 2013 than in the third quarter of 2012.
The current account surplus in the third quarter was €3.4bn, an increase of €1.2bn on the same period last year.
Alan McQuaid, of Merrion Stockbrokers, said the performance was better than expected. But added that on the basis of the GDP figures for the three quarters, it was hard to see the economy posting positive growth this year. The Department of Finance is projecting 0.2pc growth for the year.
"Overall, we continue to believe that Ireland is better placed than most to benefit from the upturn in the world economy, and assuming no major external shocks next year, there is every chance that the Government's official 2pc GDP growth target will be met," Mr McQuaid said.
Specialist bank Investec said the results confirmed that the prospects for the economy had improved over the second half of the year.
Trade union Siptu said the data showed a welcome pick-up in domestic demand.
Economist Marie Sherlock said: "Over the first three quarters of 2013, real GDP remains 0.5pc below that recorded in the same period in 2012. In order to realise the Government's target of 0.2pc growth for the year, a real GDP increase of 1pc in the final quarter will be needed. This isn't impossible given that export demand is likely to rebound."