Irish house prices are expected to increase by a further 10% in 2017

A new report surveys Ireland's economic outlook...

Irish house prices are expected to increase by a further 10% in 2017

Gareth Fuller/PA Wire/PA Images

Goodbody reports that 2016's "two major shocks" in the UK and US "have yet to have an impact on the Irish economy."

"Economic momentum remains strong. We reiterate our forecasts for another year of impressive growth for the Irish economy in 2017," it states in its second quarter 'Health Check' for the Irish economy.

The firm predicts that core domestic demand will increase by 3.7% in both 2017 and 2018.

"While Brexit remains the biggest external risk, the threat of US tax reform impacting on Ireland’s FDI stock appears to have abated," the report states.

It expects construction and consumption to fuel Irish growth.

Property

It adds that it believes that a 30% (up from 22%) increase in new mortgage lending is on the way this year, growing to €7.4bn.

It's expecting a further 17% increase in 2018 - that's 2% above its previous forecast.

Goodbody has upped its expected rate of house price inflation from 8% to 10%.

"As housing completions grow to meet demand of 27,000 to 36,000 (units) over the coming years, we believe new mortgage lending can grow to €13.5bn," its chief economist Dermot O'Leary added.

Revenue

The report notes that disappointing tax returns highlight a "need for caution in public spending plans for the coming years."

It adds that last year's tax takings, which were ahead of forecasts, should be used to "address underspending on capital infrastructure."