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Irish economy 'fastest growing'

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EU commissioner for economic and financial affairs, taxation and customs Pierre Moscovici addresses the media in Brussels (AP)

EU commissioner for economic and financial affairs, taxation and customs Pierre Moscovici addresses the media in Brussels (AP)

EU commissioner for economic and financial affairs, taxation and customs Pierre Moscovici addresses the media in Brussels (AP)

Ireland is going to have the fastest growing economy in the European Union this year, officials in Brussels have said.

Although the forecasts have been revised down slightly, a report said the recovery in fortunes is set to continue into 2015 and the following year.

The European Commission predicts that Irish gross domestic product - the value of all the goods and services in the state including the multinational sector - will grow by 3.5% this year.

In the analysis published as part of its winter economic outlook, Brussels chiefs said the Irish economy grew by 4.8% last year and forecast that the strong performance will con tinue into 2016 at a rate of 3.6%.

On unemployment, the EC report said the jobless rate will come down from 11.1% for 2014, to 9.6% in 2015 and 8.8% in 2016, bringing Ireland below the EU average this year and next year.

For the EU as a whole, Brussels said growth this year is forecast to rise to 1.7% and to 1.3% for the euro area.

The review of Ireland's economy warned that it was subject to volatility - demonstrated by the strong growth in the first nine months of last year and a flat performance in the last three months.

The EC has forecast that household consumption will recover and grow, complimenting the success of the export sector over the last two years.

It said employment figures, retail sales and tax receipts all point to a recovery in consumption with rising wages and falls in energy prices expected to provide further stimulus.

The report noted that businesses and households remain focused on reducing the amount of debt they have which in turn "keeps demand for credit subdued and weighs on domestic demand".

The Commission identified the main risks to strong Irish economic growth as the strength of the wider euro area and the outlook in the UK.

Looking at the European Union as a whole the report from Brussels said that all economies are expected to grow again this year for the first time since 2007.