Business group Ibec has predicted another strong year for the economy, despite adding that the economic growth remains "unbalanced and unsustainable".

The group also warns that recent worries about the US economy may cause difficulties for exporters.

In its latest quarterly analysis, Ibec forecasts the economy will grow by 5.5 per cent, slightly slower than 2006 but significantly higher than the latest forecast for euro-zone growth of 2.5 per cent.

"In recent years the Irish economy has enjoyed strong growth but it is unbalanced and unsustainable and our competitive position has slipped," Ibec's quarterly review of economic trends stated yesterday. "Recent job loss announcements in Ireland are a concern and demonstrate only too clearly the difficulties some companies are experiencing."

While welcoming the fall in inflation in February, Ibec's chief economist Danny McCoy said it wasn't enough to allay fears about the cost of doing business.

"People are saying the cost base is too high. That has to be accepted," he said.

According to Ibec the forthcoming National Development Plan will improve productivity in the Irish economy, but the group is calling on the Government to ensure that it is implemented more efficiently than the previous plan.

"Under the last programme progress in the early stages was too slow due to weak programme planning and inadequate programme management," Mr McCoy said.