Economic growth is accelerating and will approach 6 per cent next year, according to the latest research from Goodbody Stockbrokers.
The broker's economists say the outlook for the economy is "extremely favourable", based in part on the likely impact of maturing Special Savings Incentive Accounts (SSIAs).
Goodbody also concludes that most households in the Republic are "well positioned financially" to deal with rising interest rates and the associated higher cost of borrowing. The broker points to the cushioning effects of a high household savings ratio and strong jobs and wage growth.
Government policy, in the run-up to an election, is also likely to be "supportive" to consumers, Goodbody believes.
Annual house-price inflation will reach double digit percentages early next year, according to the analysis. Goodbody had expected the "measured slowdown" in house prices to continue this year but now says it will take more time.
The broker judges that about 80,000 houses have been built this year, up from last year's record of 77,000.
"Recent data solidify the view that the Irish economy is set for a prolonged period of impressive economic growth," Goodbody's economists note.
They point in particular to "the unprecedented windfall" that will flow from SSIAs next year and in 2007. At least €15 billion is set to be released from SSIAs when the scheme matures between 2006 and 2007, according to Goodbody's research.
