Our economy is growing strongly, tax revenue is running ahead of its budgeted level, and expenditure seems to be going to plan, writes Garret FitzGerald.
That's the good news - news that is encouraging all our political parties to promise anything and everything to the electorate during the lifetime of the next government.
However, there is another side to this apparently encouraging economic picture.
The fact is that since 2002 our economic growth has not had a healthy basis.
For since then it has been founded primarily on a growth of domestic demand, which, in turn, has been based upon an excessive expansion of credit.
That credit is being used for a combination of a massive investment in housing and for lavish spending on consumer goods.
In 2005, personal consumption rose four times faster here than in the rest of the EU, and since then it has accelerated further.
This year the ESRI expects private consumption to rise by almost 8 per cent.
As a consequence, throughout the past four years imports have been rising more rapidly than exports, with the result that an already substantial current deficit in our external payments is now expected by the ESRI to rise by a further 55 per cent this year to €9 billion.
This rapidly-increasing external deficit reflects a persistent erosion of our share of global trade in goods.
Between 2002 and 2005, in a period when world trade expanded by 25 per cent, the volume of Irish exports of goods rose by only 5 per cent.
Last year, when the world trade boom continued, our goods exports failed to achieve any increase whatsoever.
This has reduced Ireland's share of world trade by one-sixth.
All this reflects a marked loss of Irish competitiveness caused by rapid Irish inflation during the first three years of this decade. This followed a huge increase in public spending prior to the 2002 election - at the very moment when, for the first time in our history, we were reaching full employment.
That splurge of public spending, at precisely the wrong time in economic terms, helped to push up Irish prices over a three-year period at a rate twice as fast as in the rest of the EU.
The damage done to our competitiveness by the self-destructive budgetary policy of 2000-2002 is still not widely understood. However, the recent publication by the OECD of its 2007 national accounts makes it now possible to measure the scale of the consequent loss of Irish competitiveness.
The data in this OECD volume shows that during the years to 2005 our costs were rising faster than in any other western European country - and this was even more true vis-a-vis the US. In those three years our cost level rose by 16 per cent more than in the rest of the EU - and by as much as 29 per cent in relation to German costs.
In the earlier period from the late 1980s until we joined the euro in 2002, our share of world trade had much more than doubled because up to 2000 our governments had been careful to ensure that we were steadily becoming more competitive.
However since then we have consistently lost ground in external markets: during a period in which the volume of world trade has grown by one-third, our exports of goods have remained almost static.
Clearly this cannot be allowed to continue. If at some point this disturbing trend is not curbed then, even as a member of the eurozone, our credit rating will eventually be questioned, and our capacity to borrow at favourable rates would be at risk.
No EU state with a stagnant export trade can go on indefinitely increasing its consumer spending several times faster than all of its neighbours while also engaging in a scale of house construction that is three times greater than elsewhere in the EU. (In 2005 we were devoting over 16 per cent of our national output to building dwellings as against barely 5 per cent in the rest of the EU).
What is most disturbing is the evident reluctance of all our politicians to face this reality, and their perverse determination to promise anything and everything to the electorate unconditionally.
It is, of course, the case that some of the spending increases and tax cuts being promised could turn out to be useful in countering a future downturn in our economy that might be precipitated either if our housing-construction boom experienced a "hard landing" or if the dollar were to collapse - or, worse still, if there was to be a simultaneous occurrence of these two events.
However, our ability to spend our way out of such a future recession would depend upon very prudent management of our resources in the period immediately ahead, building up a budgetary surplus large enough to enable us to boost a flagging economy within the constraint of the 3 per cent budgetary deficit limit that we accepted as a condition for joining the euro
And it is precisely the building up of such an enhanced budgetary surplus that could be put at risk by a too early and too rapid implementation of some of the promises now being made by the political parties.
Last year our General Government Balance, which is the criterion by which the European Commission and the European Central Bank measures the budgetary performance of member states, recorded a surplus of 2.7 per cent, but the present Government is planning to run this surplus down by three-quarters over the next three years.
In practice this may not happen because of the present buoyancy of revenue, and it would be important that the surplus be maintained at a level sufficient to give us the leeway needed to sustain our economy in any future recession.
Acceptance of such a prudent strategy by the next government, whoever it may be, need not impede the implementation of its programme, but could influence the pace at which it will be implemented.
But will the next government accept this constraint? This remains doubtful.
One of the most depressing features of our political system over the past five years has been the persistent refusal of politicians to recognise the crucial, and now unique, economic role of the budget in euro-zone member states.
We and our euro partners can no longer deploy exchange rate or interest rate policies for economic purposes, so the budget is now our only economic weapon.
It is deeply disturbing that politicians - and most political commentators - continue to talk and act as if they are totally unaware of this crucial new reality.