Employers' group IBEC has said the weaker euro and stronger than expected consumer demand are helping the Irish economy to recover.

The group said that the recession in Ireland probably ended in the first quarter of this year and that the economy was slowly returning to growth.

In March IBEC forecast GDP would shrink this year by 0.7% - it has now revised that upward to just 0.1%.

In other words the size of the Irish economy will be virtually the same as last year, although GNP is forecast to fall by a further 1.5%.

IBEC believes net exports will make a positive contribution to growth this year.

But it also sees signs that Irish consumers are spending more and an improved outlook for consumer demand is now helping to lift the economy out of recession.

That coupled with competitiveness gains leads IBEC to take a more optimistic view of the economy this year.

However, it warns that the emerging recovery here and elsewhere could be choked off if financial market stress over Europe's sovereign debt crisis continues for a number of months.