Recovery hopes take a bashing
THE Central Bank, headed by Patrick Honohan, has cut its growth outlook for this year due to slowing exports and forecast the domestic economy will remain in recession.
In its latest quarterly economic bulletin, the bank predicted GDP growth will moderate to about 0.5pc this year. It had earlier forecast GDP growth of 1.8pc for this year.
It also said that GNP will decline by about 0.7pc. The more adverse outlook has been blamed on weaker short-term prospects for external demand. Expectations for domestic demand have also weakened.
The Central Bank predicted the global economic situation will be central to the prospects for the Irish economy over the next 12 months or so.
It said a slowdown in export growth is likely this year, reflecting the outlook for growth in Ireland's main trading partners.
However, an improved export performance in 2013 is possible if the projected recovery in world demand during the second half of this year materialises.
The Central Bank believes exports will continue to contribute positively to overall GDP growth, offsetting the continued slowing of domestic demand.
Despite the downward projections, the institution has predicted the Government will hit its 8.6pc target of deficit of GDP.