The economy is recovering faster than expected, according to the Economic and Social Research Institute.
It's forecasting economic growth this year of 2 percent, and an expansion by 2.7 percent next year.
The E-S-R-I says the improvement is because employment is rising and consumer spending is picking up.
However, the think tank has urged finance minister Michael Noonan not to ease up on austerity in next week's budget.
The institute wants the government to press ahead with the full 3.1 billion euro of tax increases and spending cuts, despite Minister's Noonan's announcement yesterday that he is seeking a 2.5 billion euro saving.
It says one more tough budget is better than dragging out the austerity over two more years.
Professor John Fitzgerald of the ESRI says an increase in the numbers in work is helping the economy:
