Ibec predicts Irish economy will outperform Europe this year

In its latest Quarterly Economic Outlook, Ibec said the recovery "finally" reached the domestic economy with unemployment falling, investment increasing and the Irish consumer looking ahead with more confidence.

The group has predicted that Christmas sales this year look set to be at their highest level since 2009.

It said lower oil prices will add extra momentum to the consumer recovery, with every $10 fall in the price of a barrel of oil translating into an additional €100m spending power for Irish consumers.

Ibec has forecast continuing strong growth in 2015, with GDP rising by 4.8%.

It predicted that GNP will rise by 5.1% this year, and 4.2% in 2015.

It also said record low interest rates should act as a further boost to investment.

The group said the weak euro and a gradual recovery in global demand will support Irish exports, which will remain an important driver of the domestic economy.

It also predicted that employment growth will rise to 2.6% next year, with much of this growth in full-time employment.

It said that unemployment will fall as low as 10.5% by the end of this year, and to below 9% by the end of next year.

On the public finances, Ibec said they have grown much faster than expected.

It said strong tax revenues growth, with "prudent" expenditure controls, will see the deficit move towards 2% next year.

"Growth is coming from a broad range of sources, with domestic demand and trade contributing strongly. Ireland is set to be one of the world's best performing developed economies this year," said Ibec chief economist Fergal O'Brien.