Unemployment will fall and the Irish economy will grow over the next year and a half, according to the Economic and Social Research Institute.
The ESRI’s quarterly report says unemployment should peak at 5% in mid-2002 before falling to an overall 4.6% for the year.
Economic growth, meanwhile, is expected to be low in 2002, but the ESRI believes it will recover in 2003.
Echoing concerns from IBEC, the report says that public spending must be linked to revenue intake to avoid an exchequer deficit.
It also warns that unchecked price and wage inflation could erode many of the economic achievements of recent years.