We are the 5th most optimistic economy in the Eurozone.

That is according to new research being released by Grant Thornton today.

Their survey of 44 countries shows 36% of senior Irish executives are optimistic about Irish economic prospects which is up from 30% last year.

However there is still a fear that government debt and pension challenges will drag on growth.

More globally, it says that hopes for a strong start to economic recovery in 2013 "look to be diminishing as business confidence in mature economies continues to fall away".

US 'fiscal cliff' hurts confidence

The latest data from the International Business Report (IBR) suggests economic uncertainty caused by concerns over the United States ‘fiscal cliff’ and ongoing fears over the long-term viability of Eurozone is dampening growth prospects.

The IBR reveals that global business optimism stands at just net 4% heading into the New Year.

This contrasts to a rally in confidence seen in the first half of 2012, when global business optimism reached 23% and brings it nearer to the 0% level observed this time last year.

Ed Nusbaum is CEO of Grant Thornton International.

"There is no question that protracted negotiations over how to resolve both the sovereign debt crisis in the Eurozone and the fiscal cliff in the United States have weighed heavily on business confidence over the past 6 months" he said.

"With the economic outlook clouded by these issues, business investment becomes a much riskier proposition for many".

"The hope, both in the United States and around the world, is that these issues can be resolved and that this drop in confidence is temporary rather than the start of a longer decline" he added.

Patrick Burke is a partner with Grant Thornton and explains some of the figures.