Analysis: Taken at face value the Central Bank's prognosis for the economy is the latest in a series of upbeat predictions. Growth of 5 per cent this year and something similar next year would indeed seem to chime with other bullish forecasters and the Government itself.

But you do not have to dig very deep into the Central Bank quarterly report published yesterday to see that they are more than a little worried that the castle that is the Irish economy may be built on sand.

In particular, they are concerned about where all this growth is coming from. In the tortuous language so beloved of economists and central bankers "the decomposition of output growth [ in 2005] as between employment and productivity growth was highly unusual".

What the Bank is saying is that in an ideal, or at least better, world economic growth would come through a mixture of employment growth and increases in the productivity of the people already at work.

But last year the Irish economic story was all about growth in employment, with almost no contribution from productivity. This in turn shows that the parts of the economy that are growing are labour intensive areas such as construction and services.

The Bank's main concern appears to be that unbalanced growth reflects an unsustainable boom in construction and housing, which is linked to an equally unsustainable boom in consumer credit.

Some day the party must end. Or in the words of the Bank, there could be "adjustment problems if the contraction were to be quite rapid". Among these is a rapid fall off in the tax revenues from all this construction activity that is underpinning a pre-election uptick in Government spending.

Towards the end of the commentary that is at the front of the quarterly, the Bank administers what passes for a rebuke of the Government over its fiscal policy. It notes that last December's budget was expansionary, with the "major part" of these being attributable to discretionary increases in spending.

This spending is contributing to a Government deficit that, while not worrying in itself, is indicative of bad economic management. The Bank rather sniffily points out that "when the economy is performing well it would seem preferable to run a small surplus to provide for unforeseen events."

The unspoken inference is that rather than pouring petrol - in the form of discretionary spending - on what is an inherently unstable fire, the Government should be building a cushion for the day when the construction sector eventually runs out of steam. It is good advice but unlikely to be heeded with an election just over a year away.