The Irish economy is set to grow by at least 3 per cent a year over the coming years, or at twice the European average, according to the latest report on Ireland by ratings agency Moody’s.

Employment growth is expected to be “robust” and the level of economic growth will help ease the Government’s fiscal consolidation drive, it said in a generally positive note on the economy, although it says difficulties with non-performing bank loans and a shortage of credit will continue to act as a drag.

“Growth in the industrial, service and construction sectors imply that Government revenues will continue to grow faster than nominal gross domestic product,” the report said.

It said Ireland’s economy has been growing steadily since mid-2012, as measured by employment growth, and that barring global event risks, the growth is likely to continue.

Consumer confidence is gradually being restored thanks to employment trends and and the stabilisation of the housing market, and a small positive contribution to growth from consumer demand has “finally materialised”.

The economy will also benefit from less onerous fiscal consolidation after 2015, when the deficit will be reduced to 3 per cent of GDP.

Non-performing bank loans, muted credit availability and some household deleveraging will hamper the speed of recovery.