The latest PWC quarterly update says the Irish economy will expand by 5.2% this year, before slowing next year to 5%, still well ahead of the eurozone
PWC said for the three months to the end of June, the Irish economy expanded by 0.9%, compared to the previous quarter.
PWC said that with external demand stagnating - mainly the result of a slower US export market, domestic demand - specifically, consumer spending - was the main growth engine.
PWC said Irish unemployment at 4.45% in August, is among the lowest in the EU but inflation continues at high level.
PWC said moderating competitiveness and weaker external demand are likely to limit investment growth in the last two quarters of 2006.
The report added that the recent interest rate increases will also slow investment, which combined with falling oil prices means there should be some moderation in inflationary pressures moving into next year.
Ireland second easiest country to pay tax
Ireland's Economy Expected To Continue To Outpace Euroland Average Growth in 2006 and 2007 - says PwC analysis