Ireland now officially has the fastest growing economy in Europe, according to the Central Statistics Office.

The economy, or GDP, grew by 4.8% last year, exports increased 10.5%, while domestic demand - a key driver of jobs growth - rose 3.5%.

GNP - which strips out the effect of multinational companies - grew by 5.2%.

Spending on personal consumption grew by over 1%, with spending on goods up by just over 5%.

Spending on services was down by 2.2%. The strong spending on goods reflected very strong car sales in particular.

Capital formation - a measure of spending by businesses - grew by 11.3%.

Building investment grew by 7.2%, while there was a substantial investment in machinery and equipment which was up by nearly a third.

Investment in aircraft was down on the previous year. Stripping out aircraft purchases would give a rise of 33% in investment in machinery and investment.

All sectors of the economy recorded positive growth, particularly distribution Transport and Communications, which grew by 8%. Construction grew by just under 7%, Agriculture grew by 10%, while other services were up 3.4%.

Industry and public administration both grew by 1.1%.

GNP growth of over 2% in Q4

GDP in the fourth quarter of 2014 grew by 0.2%, while GNP grew by 2.3% during the same period.

Seasonally adjusted consumer spending grew by 1.3% compared with the third quarter, with spending on goods down 0.7% while spending on services grew 0.8%

Net imports fell 15% during the quarter, mainly due to a big increase in imports.

The balance of payments current account recorded a surplus of €11.4 billion last year, compared to a surplus of €7.6 billion in 2013.

Outlook is positive for 2015

Alan McQuaid, chief economist with Merrion, said the the early indications were that 2015 would be another very positive year, topping the euro zone GDP growth table again.

"Ireland has benefited from its close trading ties with the US and UK, two of the strongest performers on the world stage in the past twelve months," he said.

Mr McQuaid pointed out that competitiveness gains made against the rest of the euro zone in recent years may have helped and the sharp fall in the euro will be a huge plus for the economy.

"The most encouraging aspect is the pick-up in domestic demand, which augurs well for 2015. Taking all the relevant factors into consideration, it now looks like growth will be 4% plus again this year," he concluded.