The Government's advisory body on enterprise and trade has said action is needed to tackle rising prices and pay costs in Ireland, which are increasing at twice the EU average.
Launching the body's annual report for 2005 today, Forfas chief executive Martin Cronin said the situation had been caused by rising consumer and government spending, as well as strong growth in the construction sector.
Mr Cronin said there needs to be a recognition that exports will continue to be vital to Ireland's long-term economic growth.