The Central Bank's second quarterly bulletin of 2006 reports that the outlook for the Irish economy remains good
The report forecasts GNP and GDP growth for 2006 of about 5% - similar to last year's figures and a small increase on previous forecasts.
Labour costs have increased significantly in the past two years. The average increase was about 4.5% a year, compared with an increase in the euro area of about only 1%.
Pay increases, the report says, have been rising faster than productivity in the past two years.
House-building exceeds what is required over the medium-term and will have to steady slowly.
Consumer price inflation (CPI) in 2005 remained quite low at 2.2% and broadly in line with the euro area average.
CPI inflation was 2.5% in 2005.
But the Bank is converned that it has risen sharply since then, with an annual increase in February of 3.3%.
They expect inflation to level off at 3% in 2006.
Central Bank watching lending closely
Central Bank warns of loss of cost competitiveness due to falling productivity