The Economic and Social Research Institute has insisted that the Irish economy remains resilient and that it will eventually rebound to grow at about 3.25% a year in the medium-term.
But the Institute warned that there is a danger that Irish society could become transfixed by the 'very real economic difficulties' and miss the opportunity to plan for a better future in the next decade.
It insisted that the current downturn in the economy will not inflict any lasting damage to the country's long-term growth potential.
The ESRI is very deliberate about making it clear that it remains upbeat about the country's economic prospects despite the current slowdown.
It has conducted its latest two-yearly medium-term review of the economy and taken all issues into account including the downturn in our housing market, the global financial turmoil, the potential recession in the US, and the state of our public finances.
It says it still believes that the Irish economy remains fundamentally sound, and is well placed to bounce back when the global situation improves.
The ESRI says Ireland has become very good at selling services abroad and this is the key reason why we are well placed to recover when the global downturn is over.
It says the country has developed a comparative advantage in the supply of financial services, computer and IT services and other business services and it expects almost 240,000 additional service sector jobs by 2015 provided competitiveness is maintained.
It says these jobs will more than compensate for about 70,000 expected jobs losses between agriculture, manufacturing, construction and public utilities.
It also say that demand for housing will remain strong with 48,000 new houses a year still required until 2020.
The review warns, however, that although greenhouse gas emissions will be reduced substantially as a result of a new carbon tax, Ireland will still miss its emissions targets by a considerable margin.
It also says that it is important for the Government to move fairly rapidly to introduce some form of congestion charge if good value is to be obtained from the huge investment in infrastructure that is now taking place.
