THE author of a report saying the Irish economy has bounced back from its “lost decade” says it has been vital that the Irish government has had full control of its economy.

Leading SNP figures eyed the report from Goodbody Stockbrokers yesterday with envy as it forecast Irish economic growth for 2017.

The report upgraded the republic’s outlook for core domestic demand to 4.5 per cent from 3.7 per cent previously, and to 4.3 per cent for 2018, up from 3.6 per cent.

The boost has been driven by a return to boom-time consumer spending levels, and the report also forecast a return to full employment in Ireland.

After reading the report Angus Robertson, the former deputy leader of the SNP, tweeted: “Congratulations to Ireland, using the powers of independence within the European Union to deliver really impressive economic growth.”

The author of the report is Goodbody’s senior economist Dermot O’Leary.

He told The National: “You can certainly infer from the report that control of our own tax rates has played a major part in Ireland being able to recover in the way that it has.

“We have very low corporation tax rate which has attracted plenty of business to Ireland, and the British Government has of course been following suit.”

O’Leary said that EU membership for Ireland had played a very large part in the country’s recovery, and he said the UK will struggle to match its neighbour’s growth once it leaves the EU.

He also said Brexit will have a range of potential impacts on Ireland, saying its economic growth forecast for 2019 is 3.6 per cent, “but is subject to a large degree of uncertainty due to the unknown shape of trade relations with the UK post-March 2019”.

“Failure to agree a trade deal will do significant damage to trade between Ireland and the UK, with the highest tariffs likely to be applied to goods that Ireland depends most on the UK as a source of demand, namely the agri-food sector,” the broker said.

Other problem areas include the export of livestock from Ireland to Europe, much of which goes through through Holyhead in Anglesey to Dover to be shipped on again.

But O’Leary said Brexit will probably boost the Irish economy as non-EU businesses, especially those from the US, seek a base to give them access to European markets in Europe and opt for English-speaking Ireland rather than the UK .

On the employment front, with jobs growing at the fastest pace since 1999, the Goodbody report is forecasting full employment in Ireland by the end of 2018, with the jobless rate falling to just five per cent in late 2018.

The report says this indicates Ireland may have to rely further on immigrant labour to maintain its momentum as one of Europe’s fastest-growing economies, another option which the UK will find difficult and contentious once Brexit is complete.

O’Leary’s report also reminds economists that there is a negative legacy of the boom years, Ireland’s national debt, which is still high in both an international and a historical context.

And he flags up a warning over capacity constraints, “especially in housing and infrastructure, meaning the governing will have to prioritise capital spending in the coming years” O’Leary said.

“Addressing these capacity constraints will be crucial to maintaining Ireland’s superior growth profile over the medium-term,” he added.