There are two questions raised by the economic figures published today. The first is how Ireland can be growing so rapidly when the rest of Europe is languishing. The second is why consumers here remain so cautious, despite signs that the economy has picked up significantly.

Remarkably, the EU forecast of GDP growth of 4.6 per cent here this year looks a bit cautious. Based on economic figures for the first half of the year, growth looks likely to be at least 5 per cent - unless the first half figures are significantly revised, which is possible. For next year, the EU Commission forecast is for growth here of 3.6 per cent, compared to just 1.2 per cent for the euro zone as a whole.

Can we continue to grow at three times the average of our euro zone partners? Possibly yes, but for this to happen two things need to happen. First, our other trading partners - the UK and the US in particular - need to remain healthy, so that our exports can continue to grow. Second,the euro zone needs to avoid an even worse outcome. We can probably manage against a backdrop of slow growth elsewhere in the euro zone, but “no growth” , or a collapse into a deflationary cycle, would surely hit our prospects. Remember also that low euro growth keeps interest rates down, which is good for our indebted exchequer and households.

The second question - why do consumers remain so cautious - is also relevant to the outlook. Exports and rising investment have pushed the economy forward, but we need consumer spending to kick in for the whole thing to be sustainable.

To anyone who has spent time talking to people trading in the domestic economy, today’s confidence figures will not have come as a complete surprise. In the shops and restaurants, owners see some stability, but no great surge. That said, the extent of the fall in the KBC/ESRI consumer confidence index - down from 92.8 in September to 85.5 in October - was surprising.

Surveys can sometimes thrown up strange results and perhaps confidence will bounce back next month. But there can be no doubt, either, that household budgets remain under pressure and people see new water chargers coming down the tracks. Some people are feeling the recovery in their pockets -- particularly those who have moved from unemployment into work. But there has been no generalised rise in spending power across the majority of households and so consumer confidence remains fickle and patchy.

The recovery is certainly there in the figures, but the feel-good factor is absent.