Ireland is set to remain the fastest-growing economy in the European Union, the European Commission said this morning, with growth of 3.5 per cent predicted for 2015.

The European Commission slightly revised downwards its projections for Irish GDP growth, predicting a 3.5 per cent growth in 2015 compared to the figure of 3.6 per cent estimated two months ago. Nonetheless, the forecast growth rate is the highest among all 28 EU economies. The French economy is expected to grow by 1 per cent, with German GDP expected to grow by 1.5 per cent this year.

In its analysis of the Irish economy published as part of its Winter Economic Outlook this morning, the Commission said that Growth slowed in the third quarter of the year in Ireland but is still set to exceed expectations. Noting the “volatility” of Ireland’s national accounts in pointed out that GDP growth fell to close to zero in the third quarter of last year having recorded record growth in the first half. It highlighted the impact of the aircraft purchase and intellectual property deals by multinationals on the volatile exchequer figures.

However, Ireland’s trade links with the US and heavy presence of multinationals will continue to benefit the economy, the Commission said. “Net exports should therefore continue to grow in 2015 and 2016, in spite of slowing growth in the UK and the low growth in the euro-area.”

Unemployment is expected to reach 9.6 per cent next year before falling to 8.8 per cent in 2016.

Ireland’s closely-watched debt to gdp ratio -which stood at 123.3 per cent of gdp in 2013 - is expected to fall to 110.3 per cent of gdp in 2015 and 108 per cent next year.

Referring to Ireland’s economic performance, EU economics commissioner Pierre Moscovici said the Commission forsees “ a really strong growth both in 2015 and 2016.” He highlighted the fact that Ireland had reduced its deficit to 4 per cent of gdp in 2014, down from 5.7 per cent in 2013 thanks to buoyant tax revenues and despite “very strong over spending.” A slowdown in the euro and British economy were the main risks to Ireland’s recovery, he added.

Overall, the European economy is expected to grow by 1.7 per cent this year, and 1.3 per cent in the euro area, slightly up from previous estimates.

EU economics commissioner Pierre Moscovici said the decline in oil price, depreciating euro and recently launched quantitative easing programme by the ECB would provide “a welcome shot in the arm for the EU economy. “

“Europe’s economic outlook is a little brighter today than when we presented our last forecast,” he said. However, the mildly improving economic picture would not be enough to significantly lift unemployment. “Economic growth is expected to be insufficient for a marked improved in employment, “ the French Commissioner said.