By Padraic Halpin and Paul Taylor
CORK Ireland/PARIS (Reuters) - Ireland's economy is set to grow by a better-than-expected 3 percent this year and the government has won German backing to refinance some of its bailout loans, the country's two most senior finance officials said on Thursday.
Finance Minister Michael Noonan upgraded an earlier forecast for growth of 2.1 percent and said the economy would also grow by 3 percent in 2015 after seeing unemployment fall below the euro zone average, retail sales rise and exports rebound.
"The department of finance official figure for 2014 is we're going to grow just ahead of 3 percent and next year we'll be around 3 percent as well," Noonan told reporters ahead of a meeting of his Fine Gael party in county Cork.
"That's very strong when you look at growth rates across Europe. I can see a number of things that could see growth slip back but if it's managed prudently, you could run that for a decade and solve the problems that Ireland has."
Spending Minister Brendan Howlin, speaking to reporters in Paris, said the German parliament had set a date to ratify Ireland's request to refinance its bailout loans from the International Monetary Fund (IMF), a measure that would save Dublin billions of euros but needs sign-off from European Union members.
The rebound in the economy puts the government in line with a median forecast of 3.1 percent gross domestic product (GDP) growth in a Reuters poll of 12 economists last month.
The robust growth, in contrasts to the stalled recovery in much of the euro zone, will also allow Ireland to ease up significantly on further austerity measures in next month's budget, both ministers have said.
Ireland was one of the biggest basket cases of the euro zone crisis and became the second country, after Greece, to seek a bailout in 2010. Its remarkable recovery could be seen to vindicate the austerity packages imposed under the terms of an EU/IMF bailout which Ireland completed last year.
Ireland is hoping to further improve its finances through the early repayment of its more expensive IMF loans, reducing the cost of carrying debt that hit 116 percent of GDP or around 200 billion euros last year.
The measure could save some 1.5 billion euros over the next five years, "an awful lot of money in Irish terms", Noonan said.
Noonan, who this week put the proposal to European officials including ECB President Mario Draghi and Eurogroup President Jeroen Dijsselbloem, said it could be some time before it is signed off. But Howlin said political agreement could be reached at the informal Finance Ministers' meeting in Milan this week.
Howlin also said the European Central Bank was not putting pressure on Ireland to accelerate the sale of new bonds it pledged to issue in a deal struck with Frankfurt last year that reduced the burden of state-owned bank debts.
"All those we have talked to - Draghi, Dijsselbloem, Schaeuble and others - are on board. The Finnish parliament has endorsed it. The German parliament has set a date to ratify it. Nobody is against," Howlin said in Paris.
"Of course the ECB want us to redeem it as fast as we can. They are happy with the schedule for selling back into the market. They have not connected the two issues."
(Editing by Toby Chopra and Sonya Hepinstall)