Brexit tariff war risk to booming economy
The economy is expected to rise by at least 5pc this year while unemployment levels are set to 'drop like a stone', according to the country's biggest stockbroker.
It comes with a warning that a bad Brexit deal could yet set the economy here off course, leaving the Exchequer vulnerable to any increased spending commitments.
Davy Stockbrokers is predicting house-price growth will hit 10pc as wage growth and looser lending rules combine with the ongoing lack of supply.
Unemployment is set to fall to 5.3pc in 2018 - around a third of the level recorded in 2012.
"Unemployment is dropping like a stone," said Davy chief economist Conall Mac Coille.
Growth had been widely predicted to slow this year because of the effects of June's Brexit vote.
However, Mr Mac Coille said short-term indicators in the first part of this year, including manufacturing and services sector data and job numbers, pointed to rapid growth.
Export growth is predicted to pick up from 2.4pc in 2016 to 4.5pc in 2017 and 4.4pc in 2018.
The new predictions for the Irish economy will heap pressure on the Government as it goes in to renegotiate public sector demands.
The first report of the Public Service Pay Commission, which is due to be presented to cabinet tomorrow, is expected to advise the Government that public servants should pay more towards their pensions. The report will tell the Government to keep giving pay rises to public-sector workers by unwinding the €692m pay cuts that remain in place under emergency legislation.
But it will recommend that the pension levy imposed during the crash should be converted into a pension contribution.
It concludes that public-sector pensions are significantly out of line with private-sector workers' benefits.