A report by Davy Stockbrokers says it now appears that economic growth in 2004 was weaker than previously thought.
But the broker has reduced its economic growth forecast for this year only marginally to 4.7%.
Economists Robbie Kelleher and Rossa White cite revised CSO figures which show that the annual rate of growth in the final quarter of 2004 was just 2.6%, compared with 7.1% previously. 'The economy entered the current year with a lot less momentum than we previously thought,' the report says.
Davy criticises the lack of information on housing so far this year - a recent report by the Department of Environment & Local Government did not give any figures on house completions. Davy said the statistical authorities needed to address this issue 'as a matter of urgency'. The report has left its forecast for house building unchanged at 77,000, the same as last year.
The economists have lowered their forecast for consumer spending growth from 5.5% to 5% after a weaker second quarter. On the public finances, they say tax revenues could be more than €1 billion ahead of Budget targets, though some of these gains may have to be used to finance the repayment of nursing home charges.
The Davy report predicts that the euro will be back at $1.35 levels by the end of the year, while the US Federal Reserve will continue to lift interest rates to 4.25%. The economists see no change in ECB rates this year.
