Goodbody Stockbrokers raised its forecast for the Irish economy after data published yesterday showed growth resumed in the first quarter of the year.
Goodbody said it expects the economy to expand 1.6 per cent this year after previously forecasting a stagnation.
"The fact that the Irish economy has emerged from recession is clearly welcome, although it trails
the onset of recovery in most other developed nations," Goodbody economist Dermot O'Leary said.
"We will have to wait until 2011 before we see growth emerge in the domestic sectors of the economy.
Yesterday's figures showed the economy grew for the first time in two years.
However, analysts have warned of the emergence of a "two-speed" economy as the data from the Central Statistics Office (CSO) showed the growth was largely driven by multinational companies and exports.
The domestic economy continued to disappoint as consumer spending and capital investment fell over the three-month period.
The figures indicated a 2.7 per cent rise in seasonally adjusted gross domestic product (GDP) compared with the last quarter of 2009, beating predictions of a 1 per cent rise, but gross national product (GNP), which excludes the contribution of foreign-owned firms, was down 0.5 per cent.
Additional reporting: Bloomberg