Economic growth could hit 4.5 per cent this year and reach 6 per cent in 2005, a leading economist predicted yesterday.

Bank of Ireland Treasury's chief economist, Dr Dan McLaughlin, said the Republic had survived the downturn with most of the gains of the boom years intact and was poised to enter a period of solid growth.

Basing his predictions on available data from the first three quarters of 2003, he said gross national product (GNP), which excludes profits repatriated by multinationals, would come in at 3.5 per cent, up from virtually zero the previous year.

He said gross domestic product (GDP), which includes repatriated profits, should come in at 1.5 per cent for 2003 - a marked slump from 2002, when it hit 6.5 per cent. Dr McLaughlin attributed this to last year's fall in exports.

He said that the global recovery was well established and the consensus was for 4.5 per cent growth in the US and 2.5-3 per cent in Britain, the State's biggest customer.

"Consequently, we are happy to run with our 4.5 per cent GDP forecast for this year, based on a rebound in exports," Dr McLaughlin said.

The economist said a more positive international picture should drive the economy closer to its potential growth rate.

"This is probably around 6 per cent, so 2005 could see this figure reached, or even breached, depending on the resilience of the US rebound in activity," he said.