A new report from Goodbody Stockbrokers has forecast that the Irish economy will shrink by 6% this year.
The report also predicts that the economy will shrink by another 2.5% in 2010, making it the worst recession in a developed country since Finland in the early 1990s.
Goodbody's economic forecast compares with the 4% falls for this year recently predicted by the Government and the Central Bank.
However, the report says these figures are becoming more irrelevant as the main question now is whether Ireland can put its public finances in order.
It says short-term forecasts for tax revenue are too optimistic.
Speaking on RTÉ News At One, Goodbody Stockbrokers' Chief Economist Dermot O'Leary (below) said the Government would have to consider some unpalatable decisions, including increases in taxes and spending cuts.
He said that because of falling prices it could be possible to cut social welfare payments without reducing their real value.
Goodbody says social welfare spending is an area 'too big to be ignored'.
It also believes the Government may have to inject more money into the banks, putting the total cost at €9bn. It believes the banks will incur bad debts of €28bn over three years.