The Irish economy should continue to outperform the rest of the EU in terms of average productivity growth albeit at a slower rate than before, according to a new report.

UK-based economists, Mr Roger Bootle and Mr Paul Ashworth, suggest there are dangers for the economy in the short term, namely the impact of a rise in the value of the euro, weaker export markets and a crash in the housing market.

"Growth will not continue at rates seen in the recent past, there are serious short-term dangers, but even so, Ireland should continue to grow faster than its fellow EU members for many years to come."

Mr Bootle is a former economic adviser to the then UK Chancellor of the Exchequer, Mr Ken Clarke. He is currently managing director of Capital Economics, a consultancy based in London. Mr Ashworth is the firm's international economist.

In the report, the authors argue that even if a period of short-term weakness were avoided the growth in employment seen in recent years here would not be repeated.

"We expect it to ease back to around 1.5 per cent over the coming five years, compared to nearly 5 per cent between 1994 and 2001."

The report refers to one view that the strong growth in the Irish economy has been a product of an over-heated economy where its temporary effects have been disguised. Mr Bootle and Mr Ashworth suggest this is overstated, noting that Irish inflation has not been particularly high and the trade balance has been strong.

The primary reason for strong economic growth, they say, has been the dramatic rise in employment.

"This partly reflects a strong rise in the share of the population who are of working age. But it also reflects a huge success in attracting people who were previously inactive - especially women - into the labour force and off the dole queues."

The report states that the growth in employment is likely to remain much more subdued over coming years unless Ireland can rapidly increase the flow of migrants entering the State from abroad. "Given the large number of Irish nationals resident overseas, this is not implausible.

"But one offsetting factor is the high cost of housing, which might make further significant inflows of labour difficult."

The labour force should be buttressed though by a further rise in female participation rates or even slightly higher net migration into Ireland.