Ireland's economic growth to accelerate with gross domestic product (GDP) now forecast to increase by 2.8 percent in 2014 and 3.4 percent in 2015, according to an economic outlook report released on Tuesday.

In its latest economic outlook, Bank of Ireland, one of the country's four biggest commercial banks, has forecast a strengthening of the recovery, with GDP growth revised upwards for this year and next and continued momentum on the jobs creation front.

It said strong export growth of 4 percent is projected for 2014 and that investment and retail sales are picking up.

The commercial bank said the number at work will increase by 42,000 this year and unemployment rate is projected to fall to 10.4 percent in 2015.

"2014 had a strong start with GDP and GNP recording solid growth, further job gains, a sharp rebound in exports, a pick-up in investment, and a slight increase in consumer spending," it said.

"Prospects for the second quarter also look good, with positive signals from export orders books, industrial production data and retail sales," it added.

The commercial bank attributed the strong export growth to improving external demand, favorable exchange rate movements and the waning impact of the patent cliff.

It said domestic activity and the continuing recovery in the property market are providing additional support to investment.

"As confidence and employment gains feed through, consumer spending is also set to firm," the commercial bank said.