AS many as 52,000 people are set to be lifted off the dole queues next year, according to the Economic and Social Research Institute (ESRI).
In a new report, the think-tank is predicting that the economy will grow by 3.4pc this year, significantly higher than the Government's 2.1pc estimate.
Meanwhile, it has said that despite fears of a new property boom fuelled by rising property prices and a supply shortage, house prices are still undervalued by 27pc.
If the organisation's prediction on job creation proves correct, it will be the first time in five years that the unemployment rate drops below 10pc.
In its summer economic commentary, the ESRI said the unemployment rate was steadily showing signs of moving towards European averages.
And it said emigration would fall between this year and next because of the forecasted growth in employment rates.
The number of people on the Live Register last month fell to almost 383,000.
ESRI economist David Duffy said that the domestic economy was starting to make a contribution to the recovery.
"We're starting to see more balance emerging in the growth," he said.
"Sentiment is picking up on the back of a more positive economic outlook and people having a more positive perception of the labour market."
The ESRI said that if their economic growth forecast pans out, the Government could get away with imposing less than €1bn in austerity measures in October's Budget.
Last night Tanaiste Joan Burton said it was "quite possible" that the Government could reassess its growth rate estimate ahead of the Budget.
And she added: "I said quite early on that it wouldn't be necessary to have the kind of cuts that were a feature of the 'Troika years' budgets."
In relation to the property market, the ESRI predicted that prices are set to rise for another three years.
It estimates that prices are set to increase by 6.5pc a year up to 2017.