Irish growth is set to continue into next year according to the latest predictions from the International Monetary Fund (IMF).

In its latest World Economic Outlook, the IMF has predicted that economic growth here will continue at 7 per cent with inflation at 2 per cent. The Republic stands out with its "remarkable" growth since 1994, the IMF said.

In an very upbeat assessment of the Irish economy, the IMF pointed out that there were "overheating" concerns but it did not draw particular attention to these. Rather it pointed to sustained increases in competitiveness and the so-called virtuous circle of real income gains as well as strong employment growth.

The IMF points to strong productivity gains, which it says were helped by foreign direct investment attracted by advantageous tax arrangements. It also points to moderate wage increases, which it says were helped by the tripartite agreement.

The IMF estimates that the economy will slow down slightly this year to 7.5 per cent and to 7 per cent in 2000, from 8.9 per cent last year. At the same time, inflation will fall slightly to 2 per cent this year and next from 2.4 per cent last year.

Unemployment will also continue to improve with a 6.5 per cent rate expected this year and 6.2 per cent next year from 7.7 per cent last year.