Growth prospects slip

Ireland's Central Bank has significantly cut its growth outlook for this year as a result of slowing exports and it predicts that the Irish economy is going to remain in recession for 2012.

In its latest quarterly economic bulletin, the bank predicted that Gross Domestic Product growth would moderate to about 0.5 percent in 2012. It had earlier forecast GDP growth of 1.8 percent for this year. It also said that Gross National Product would fall by about 0.7 percent.

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The bank, according to an Irish Times report, described this was a significant downward revision on its previous projections. the dip was mainly due to the weaker short-term prospects for external demand. Expectations for domestic demand had also weakened somewhat.

The bank warned that the depth and duration of the current global economic weakness would be central to the prospects for the Irish economy over the next year or so.

It noted that the performance of exports last year tracked the worldwide trend with overall Irish exports (see food exports report on this page) experiencing a relatively strong performance in the first quarter, followed by a significant slowdown for the rest of the year.

The Central Bank said that a slowdown in export growth was also likely this year as a result of anticipated lower growth rates in export market countries.

The bank report stated that exports would continue to contribute positively to overall GDP growth, and this would offset the continued slowing of domestic demand.