Mr Ahern says low unemployment is due to his economic policies

Figures from the CSO also showed that employment and the labour force in Ireland are growing faster than in any other EU state.

The CSO reported that total employment stood at about 1.7 million in the first quarter, with an annual increase of 59,300.

Conversely, 65,600 people were unemployed, representing a fall of 15,900.

Dublin thriving

The lowest unemployment rate was in Dublin, where only 2.6% of the workforce was without jobs. The figure rises to 5% in areas near the border with Northern Ireland.

Dublin has the lowest unemployment

The increasing size of Ireland's workforce is attributed to a baby boom in the 1980s and a booming economy.

Prime Minister Bertie Ahern said: "I believe that they [the figures] are the result of our tax and economic policies."

The figures contrast with the 1980s when unemployment was running at about 15%.

Economic boom

Ireland's economic boom began in the mid-1990s and has created jobs for thousands - to the point where labour shortages present a potential barrier to further growth.

Many new jobs have been created by multinational companies which have seen the country as an English-speaking gateway to the eurozone.

Companies have also been attracted by low corporate taxes, government incentives and a young, well-educated workforce.

New jobs

Coincidentally, deputy Prime Minister Mary Harney announced on Tuesday that two US companies would be creating more jobs in Ireland.

She confirmed the creation of 500 posts by the American biochemical company Genzeyn.

Additionally, Irish-American plastics concern Nypro, which makes plastic mouldings for medical equipment and telephones, is set to create 300 jobs.