An end to Ireland's economic boom is not in sight and the economy should post the strongest growth in the entire OECD area again this year, according to a new report from Merrill Lynch.

The stockbroker says Ireland seems destined to be "an oasis of strong growth in an increasingly weak global economy" next year.

The report says that Irish domestic fundamentals point to the need for tighter monetary policy. However, Economic and Monetary Union (EMU) will deliver a major easing of monetary policy in the next three months and Ireland will enjoy an "EMU honeymoon" next year.

As a result, Merrill Lynch believes some pick-up in consumer price inflation seems likely as interest rates fall to converge with the rest of the euro zone.

While fiscal policy may well play a modest role in dampening activity in the near future, the degree of fiscal tightening required to fully offset the effects of the large fall in interest rates would probably not be politically feasible, Merrill Lynch says.