Official figures show that the Irish economy, as measured by gross domestic product contracted by 1.9% in the third quarter of this year.
Under the gross national product measure - which does not include profits made by multi-nationals operating here - the economy shrank by 2.2%.
The figures appear disappointing following growth earlier in the year, but CSO economists are warning against reading too much into quarterly changes.
The latest figures were affected by a drop of more than 20% in investment, but this can be heavily influenced by purchases of bigger items such as planes.
On an annual basis, GDP fell by 0.1% and GNP was down 4.2%.
The CSO said consumer spending and government spending both fell by 1.3% during the third quarter, while investment slumped by 20.9%. Exports increased by 0.8%, however.
The only sector to record an increase in output during the third quarter was agriculture, forestry and fishing, where output rose 4.5%. Industrial output fell 1.3%, including a 5.9% drop in building and construction.
Over the previous 12 months, consumer spending and government spending have both fallen by 3.9%, while investment has slumped by 22.2%.
NCB's chief economist Brian Devine also said it would have to look at lowering its 2012 growth forecast of 1.1% after today's figures, though he added that quarterly GDP figures were extremley volatile and he was not placing too much weight on one quarter.
Economists likely to lower forecasts
Bloxham economist Alan McQuaid said GDP growth was still positive at 0.7% for the first nine months of the year, and it was hard to see growth for the full year coming in any higher than this.
He said the figures again highlighted the two-speed nature of the Irish economy at present with domestic demand still very weak, and exports the only real shining light.
Goodbody economist Dermot O'Leary called the data disappointing, adding that they were likely to lead to a downgrade of its growth forecasts for this year and next year.
Davy's Conall Mac Coille said investment spending could easily bounce back in the final quarter. Davy is also likely to lower its 2011 GDP growth forecast from 1.1%. He said there was "enormous uncertainty" about the final quarter of this year.
Separate CSO figures show that the balance of payments current account surplus in the third quarter of this year was €850m, down more than €300m compared with the same period last year. The balance of payments measures flows of income into and out of the economy.
The merchandise surplus of more than €9.86 billion was boosted by strong exports. But the invisibles deficit widened, mainly because of a fall in the amount of investment income coming into the country from abroad.
For the first nine months of this year, there was a balance of payments deficit of €669m, compared with a deficit of €794m in the same period last year.
