Ireland's consumer sentiment index rose sharply in December from 71 to 79.8, the highest reading since June 2007, according to latest figures published on Wednesday.
The index, compiled by KBC Bank Ireland and the Economic and Social Research Institute (ESRI), is based on monthly surveys with Irish consumers.
KBC Bank Ireland chief economist Austin Hughes said the driving force behind the improvement in Irish consumer sentiment through 2013 was "an easing in fears about the outlook for the Irish economy."
In December 2012, 53 percent of those surveyed envisaged "a continuing worsening of Irish economic conditions." Last month, by contrast, 51 percent of respondents said they expect the Irish economy to improve in the coming year.
"This continued in December and was probably helped by a focus on a range of positive recent economic developments as Ireland exited the bailout program," Hughes said.
"There also seems to be some sense in the December survey that consumers feel the worst may be over in terms of the impact of austerity measures on their household finances," he added.
Hughes said the December 2013 reading was the strongest in six and a half years.
"As such, it points towards a clear improvement in the mood of consumers after what has been a very painful period," he said.
"The details show that a majority of consumers are now positive about the outlook for the Irish economy and the prospect for jobs."
But Hughes said the number of consumers who think their personal finances will worsen in the coming year is more than two and a half times as great as the number that expects an improvement.
"This is likely to restrain any growth in consumer spending in the coming year," he said.