The Republic's economy has started growing at a rate reminiscent of the days of the Celtic Tiger in the late 1990s and will expand by up to six per cent this year, Dr Dan McLaughlin, chief economist with the Bank of Ireland predicted this morning.
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In his latest economic outlook an upbeat Dr McLaughlin also said he expected tax receipts to be €2 billion ahead of the Budget target for the year.
The predicted growth of up to 6 per cent for 2004 is well ahead of most recent forecasts and up 1.5 per cent on his most recent prediction.
"The euro is showing some signs of economic life adding to an international backdrop, which is the most positive faced by the Irish economy since the late 1990's," he said.
"The upshot is a quickening in the pace of economic activity in Ireland, with projected 6 per cent growth and a return of the Celtic Tiger. This is below the growth rates recorded in the 1990's, largely because Ireland has no pool of unemployed workers to draw from, but it is high enough to keep Ireland well ahead in the euro growth league," he added
He said the global economic recovery had turned into "a boom in a number of key economies" including the US and China which means that the international backdrop is the most positive faced by the Irish economy for some years.
"The strength of economic activity will also underpin exchequer finances and it is expected that tax receipts will exceed the budget target by ?2 billion. This does not take full account of any inflows from offshore accounts. Consequently, the general Government balance will be in surplus, opening up the possibility of a much more generous tax package in the 2005 budget", he concluded.
There will be significant growth in consumer spending, investment, he added saying that exports would also accelerate
On the downside, Dr McLaughlin said inflation for the year would probably climb to 2.3 per cent because of rising oil prices.
