The economy grew by just over 8 per cent last year, marking the fifth successive year of strong growth, according to the latest figures from the Central Statistics Office. Gross National Product (GNP) grew by 8.1 per cent, compared to 9 per cent in 1997.

Gross Domestic Product (GDP), a slightly different measure which tends to show a higher growth rate as it does not exclude multinational profit repatriations, grew by 8.9 per cent in 1998, compared to a growth rate of 10.7 per cent in the previous year.

In the five years since 1993, the economy has grown by 45 per cent, the CSO stated.

The figures confirmed Ireland's position as the highest growth economy in the EU, with growth well ahead of the average GDP rise of less than 3 per cent across the Union last year.

Consumer spending continued to increase strongly, rising by 7.4 per cent in real terms in 1998, proving a major spur to overall growth.

Emphasising the strong contribution from domestic economic activity, investment spending rose by 16.8 per cent in real terms.

Government spending, meanwhile, increased by 5.9 per cent.

The State's export performance remained strong and exports exceeded imports by £6.98 billion, compared with £6.32 billion in 1997.

However, this was offset by an increase of £1.13 billion - or 18 per cent - in net factor outflows to the rest of the world to a total of £7.5 billion, mainly reflecting rising profit repatriations.

GDP, the value of goods and services produced in the economy, amounted to £53 billion, compared to £49 billion in 1997. GNP came to £46 million.

Employee pay was up by 11.1 per cent, compared to 10.7 per cent in 1997, although part of this increase is due to greater numbers in employment.

The CSO director, Mr Bill Keating, said the introduction of 1995 as the new base year had a small effect in reducing the growth rates from 1990 to 1995. The level of imputed rent, a notional concept measuring the benefit which accrues to people from owning their own homes, has steadily increased in line with the rapid growth in real rents.

The total figure for 1998, which forms part of GDP, amounted to £4.2 billion, about 90 per cent of which is imputed rent.

According to Bloxham economist, Mr Alan McQuaid, domestic demand continued to contribute to growth in the low interest rate environment.

"The early signs for the economy in 1999 are again extremely encouraging, with retail sales, industrial output, and exports all growing strongly," he said.

But exports were likely to face stronger competition this year, from recovering Asian economies in particular, he added.

The CSO has also reported a Balance of Payments surplus of £352 million in the first quarter of 1999, which compares with a revised surplus, incorporating new data and late returns, of £59 million in the previous quarter but contrasts with a deficit of £144 million in the same period in 1998.

The Central Statistics Office announced it had introduced a new European standard in compiling its figures on national income and expenditure for the first time. At the same time, 1995 has been taken as the new base year to calculate Gross National Product and Gross Domestic Product. The adoption of the ESA95 system of accounts means that GDP, relative to other EU states, will decrease in particular because of the large royalty payments made by foreign companies in the State.