The OECD gave an upbeat assessment on the Irish economy's prospects today but recommended reform of Ireland's social partnership model.
Despite a slowing global economy and foot-and-mouth disease, the Irish economy is expected to grow by 7.75 per cent this year, said the OECD.
The Paris-based economic think-tank said although Irish economic growth peaked last year at 11 per cent, continuing rapid rises in productivity should drive the economy this year.
But the OECD recommends reform of the social partnership model - currently the PPF. It said Irish fiscal policy should not be focused on meeting take-home pay targets promised under the PPF.
Instead the successor to the PPF should evolve towards setting general principles guiding pay determination rather than pre-committing fiscal policy.
The OECD warns the main risk to the Irish economy is overheating, leading to a surge in wage demands and a greater likelihood of a sharper, more disruptive, correction sometime in the future.