Bank of Ireland says growth in the Irish economy over the next few years will be "constrained" to 6 per cent as a result of full employment.
In its Global Markets Economic Outlook published today, the bank said: "The economy is now growing broadly in line with its potential".
It predicted the shape of expansion will be different to the recent past, with the consumer to emerge as the key driver of domestic demand.
It forecast consumer spending would rise by 5.5 per cent this year and by 7 per cent in 2006 "as the SSIAs begin to impact on consumer behaviour".
It also predicted that construction spending and manufacturing exports, particularly from the multinational sector, would play a less important role in the economy.
The bank said construction spending may rise by only 2 per cent - which will contribute to an overall slowdown in investment spending to a 3-4 per cent range from 9 per cent in 2003.
"The surge in Irish export growth in the 1990s seems to be over with annual growth in external trade settling in a 4-5 per cent range," it added.
Bank of Ireland Global Markets chief economist Dan McLaughlin said expansion of the domestically owned economy will be similar to overall output growth.
"The conditions for acceleration in consumer outlays are certainly in place - employment growth, earnings growth, a rebound in consumer confidence, low inflation, low interest rates and an expansionary budget."