The Central Bank is predicting growth of 2.1pc this year rising to 3.2pc in 2015.
In its latest quarterly bulletin, the Bank said that while the country has exited the bailout, we still need a level of austerity moving forward.
“Further progress in terms of policy implementation across a range of areas is required before Ireland can be considered to have recovered from the crisis,” the report said.
“The main challenges remain the need for further fiscal consolidation, restoring banking soundness and sustaining the rebound in employment growth through improvements in competitiveness.”
Unemployment rates are projected to drop to 11.9pc in 2014, while a further decline to 11pc in 2015 is forecast.