The Central Bank has once again revised downwards its forecasts on economic growth and unemployment.
Read the report here
The latest economic analysis from the Central Bank says the economy will shrink by 8.3% this year.
In April it said it was anticipating a 7% reduction.
It predicts an unemployment rate of 12.8% for this year but says this will deteriorate to 15% in 2010.
The outlook says Ireland is in for more recessionary pain in the short to medium term. Economic activity in Ireland will not hit rock bottom until the middle of next year.
It will be 2011 before there is evidence of recovery in domestic demand because of wage cuts, higher taxes and a declining housing market, according to the report.
The Bank says that recovery in Ireland depends on improving economic demand globally.
The only positive note in the analysis is that the level at which the bank is revising the nation’s fortunes downwards seems to be easing.
An anticipated unemployment rate of 15% next year compares to 14.5% predicted in April.
The size of the labour force is set to decline 2% this year and again next year because of people being reluctant to move to Ireland and emigration.
Deflation rather than inflation will continue into next year with the level of deflation heading towards 6% in the next few months.
Falling prices should make Ireland more competitive within the euro area.
But the Bank warns prices in Ireland are still well in excess of the euro-area average.
Meanwhile, The International Monetary Fund has urged the European Central Bank to keep the euro zone interest rates low and not to rule out a further cut if necessary.
The IMF says it has seen 'some tentative signs of improvement' in the euro zone economy and is calling for co-ordinated action by governments to clean up the banking system.
