Goodbody Stockbrokers has lowered its growth forecast for this year, saying the stronger euro and weaker global conditions will test the resilience of the Irish economy.
Its latest economic commentary says these factors are compounding the effect of a slowing housing market.
Goodbody has reduced its growth estimates - for both the GDP and GNP measures - for 2008 to 2.3% from 2.5%, mainly on the back of a lower forecast for export growth.
Because of continued weakness in house building, Goodbody has also pulled back its 2009 forecast from 3% to 2.5% for GDP and GNP.
Economist Dermot O'Leary is leaving his forecast for housing completions in 2008 unchanged at 50,000, and expects this to fall to 40,000 in 2009, though he adds that the outlook for 2009 is still uncertain.
'While we suspect that consumer spending will slow progressively over the coming quarters, we are still forecasting growth of 3% and 2% in 2008 and 2009, respectively,' says the economist. This compares with 6% in 2007.
The Goodbody report also forecast that the average inflation rate would ease to 3.2% this year from 4.9% last year, on the back of lower interest rates and more stable energy prices.
