The Irish economy has been awarded a resounding clean bill of health by AIB Global Treasury

Cyril Hardiman:

The bank's economists are predicting continued strong growth in real GDP into the future, despite building grey clouds on the global economic horizon next year and beyond. "Ireland's economic performance remains both exceptionally buoyant and resilient with real GDP expected to grow by at least 5.5pc in 2006," according to the latest economic update from AIB Global Treasury.

"A similar rate of growth is forecast for 2007, despite an expected downturn in the global economy."

Such a performance would represent the continuation of a remarkable period of steady and sustained growth in real GDP since the ending of the Celtic Tiger period in 2000, the company's team, headed by chief economist John Beggs, points out.

"Furthermore, the outlook beyond 2007 may not be as gloomy as often predicted," the economists proclaim.

They believe a number of factors should underpin growth in the short-term.

These include expansionary fiscal policy, the lagged effects of a very low interest rate regime, maturing SSIA-related expenditure and strong regional growth, especially the pick-up in activity in the eurozone and UK economies.

In addition to the very favourable outlook for economic growth, AIB Global Treasury believes other headline indicators are expected to perform strongly in 2006-2007.

Employment will continue to expand by about 3.4pc this year and by around 3pc in 2007.

They say the general Government balance should remain close to surplus as the public finances continue to benefit from the economy's buoyancy.

AIB more upbeat on Irish economy