Irish economists may be wringing their hands in despair but a leading US expert believes the Republic's economy will bounce back and "lead Europe within a decade".

Dr Robert E Kennedy thinks the Irish Republic will outperform its European rivals once again within the space of 10 years.

He predicted that the country will enjoy growth rates of around 3pc and he would put "big money" on Ireland doing better than larger countries like Germany and France.

The former adviser to the US government and head of business administration at the University of Michigan makes his optimistic predictions in a new book on outsourcing in the global economy.

He does, however, warn that the country must accept that assembly-line manufacturing will leave the country for eastern Europe and other labour markets.

This will happen because the Republic has very high labour costs compared to central and eastern Europe.

He calculated that the average wage if you divide GDP by population in Ireland is around €37,000, while in Poland it is just €8,190.

"So, in terms of low-skilled jobs involving physically assembling computer parts, Ireland can't compete," he said.

"However, where Ireland has an edge is in its highly skilled, educated workforce. Dell, for instance, is keeping most of its service and administrative base in Ireland."

Belfast Telegraph