The extent to which the Irish economy will be entering uncharted territory in 2002 is dramatically underscored by the complete inability of economic pundits to agree what is going to happen. Depending on which economist you want to believe, the Republic will grow by something between 1.6 and 7 per cent.

Similarly, the Irish economy is either already in recession and will not start to recover until late next year, or else it still has considerable momentum that will carry it through the early part of next year, by which time the global economy will have picked up, carrying the Republic with it.

The impact of the introduction of euro notes and coins on all of this will be dwarfed by the other factors at play such as the timing of the end of the US economic recession. If anything, the introduction of the euro notes and coins has already had a positive impact by flushing out so-called mattress money and boosting consumer spending in the last quarter of the year and over Christmas in particular.

This late surge in spending will have a positive knock-on effect on growth in the final quarter, which should carry through into the new year, according to Dr Dan McLaughlin, the chief economist with Bank of Ireland Group Treasury. The strength of the recent retail sales figures is one of a number of reasons why Dr McLaughlin has plumped for 5 per cent growth next year with "the risk on the upside".

This puts him pretty much in the bull camp and well ahead of the leading public sector forecasters, the Central Bank and the Economic and Social Research Institute (ESRI). They are predicting growth in gross national product (GNP) - the value in monetary terms of every thing produced by the economy less profits repatriated by multinationals - of 3.5 per cent and 2.1 per cent, respectively. At the end of the spectrum is Davy Stockbrokers, who predicts a fairly miserable 1.6 per cent.

The out and out bulls on the prospects for next year are Mr Eunan King and Mr Dermot O'Brien at NCB Stockbrokers, who are calling for growth of 7 per cent. They prefer to use the gross domestic product (GDP) measure, which adds back in the value of multinational profit repatriations and other outflows. This automatically gives a higher number but does not account for the divergence between NCB and the other more pessimistic forecasters.

This is explained by Mr King and Mr O'Brien's belief that the purchasing power of domestic consumers remains undiminished, despite the economic slowdown. Anyone who has braved the shops this Christmas holiday would be inclined to agree, but the theoretical basis for this view comes from the fact that employment levels are holding steady, pay rates are increasing and personal taxes are falling, all of which continue to put money in people's pockets.

Davy Stockbrokers, at the other end of the range, give more weight to indicators that the economy is slowing in their model. Some are anecdotal, such as falling houses prices and serious problems at a number of high-profile companies, but they help them come to the view that the economy has slowed to a standstill.

The view is supported by official data such as tax revenues, which were up only 2.6 per cent in the year to November compared to a forecast increase of 12.5 per cent. In addition, the Quarterly Household survey for the third quarter shows that unemployment has risen from 3.7 per cent to 4.3 per while the live register has also grown.

Mr Robbie Kelleher, the head of research at Davy, admits that his projection might be a bit on the low side, but it is worth noting that the ESRI is not that far ahead of him and that they have cut their forecast in recent weeks, saying that the economy was slowing faster than they originally thought. The Central Bank also acknowledges that "growth may have effectively ceased in the past two quarters".

The Department of Finance is in the middle of the pack with a GNP forecast of 3.5 per cent and GDP of 3.9 per cent. This indicates that the Government is also of the view that domestic demand remains strong but is less sanguine about the other drivers of growth; Government spending, investment and foreign trade.

It is the imponderable nature of what is going to happen in these areas that is responsible for the huge range in economic forecasts.

Some things are clear. Government spending will rise by 10.5 per cent next year, if the Government adheres to its Budget targets but other investment in the Republic, particularly by US business, will fall.

There is much less clarity about what will happen with foreign trade.

Trade is declining but the balance of trade remains strongly in the black because imports are falling more or less in tandem with exports, because most of the raw materials used in export manufacturing are imported.

It is accepted that the slowdown in the Irish economy is driven by the fall in global demand for Irish goods and services. It has been accentuated by specific economic shocks such as foot-and-mouth disease, and exposure of the Irish economy to information and communication technology industries.

It is also the common case that when the recovery comes it will be driven by foreign trade and as the Central Bank noted in its Winter Commentary: "A resumption of growth in the Irish economy is substantially dependent on a recovery in the international economy. An improvement in export demand would kick start growth and contribute to domestic demand."

The key question then is when will the US economy bounce as any global recovery will hinge on this. The consensus is that the US will bounce by the middle of next year, possibly in the second quarter, based on a range of anecdotal and statistical evidence.

The ESRI points out that, since the second World War, US recessions have averaged 11 months and we are already nine months into the current slump.

There are also tentative signs of a corporate recovery, with a number of leading companies indicating they have turned the corner, while consumer confidence seems to be creeping back up in the wake of the successful campaign in Afghanistan.

The main risk to the Republic's recovering in tandem with the US is if there is a substantial loss of competitiveness through pressure on wages and a strengthening euro. Both would push up the cost of Irish goods in dollar terms.

The euro's weakness relative to the dollar and sterling has allowed the Republic to remain competitive, while wages have risen dramatically over the past few years.

Wage demands are expected to be moderate next year given the economic climate but there is a small fear that the introduction of euro notes and coins may actually strengthen the currency.

The euro is expected to appreciate and there is talk of the euro replacing the deutschmark and rivalling the dollar as the currency of choice in the eastern European black market.

But the real question surrounds the intangible effects of the currency finally having a physical manifestation, which is something that no economist can really build into any model.