Irish economic growth will reach 5.2 per cent this year before slowing slightly to 5 per cent in 2007, according to the latest Pricewaterhousecoopers (PWC) quarterly update.
However, even the slower rate of growth next year will remain comfortably ahead of the eurozone growth projection of 1.9 per cent.
During the three months to the end of June, the Irish economy expanded by 0.9 per cent, compared to the previous quarter.
According to PWC consumer spending was the main driver of growth as exports to the US slowed amid stagnant external demand.
The report says that Irish unemployment at 4.4 per cent in August, was one of the lowest in the EU. However, inflation continues at high level.
The report notes that the recent interest rate increases may also slow investment. Combined with falling oil prices means, this should lead to a moderation in inflationary pressures next year.