Ulster Bank has given one of the most pessimistic forecasts for the Irish economy this year, saying it expects growth of just 2%.
But economist Pat McArdle predicts a rebound in 2009, with gross national product expanding by 4%.
He says the downturn in the housing market will dictate the pace of economic activity. The economist estimates 45,000 new homes will be built this year, but warns that there is a high degree of uncertainty around this forecast.
Mr McArdle also sees consumer spending growth slowing to 3% because of slower employment growth and more moderate wage increases. He expects the average inflation rate to ease from 4.9% this year to 3.1%.
The economist expects house prices to fall further this year, but to recover 'much of these losses' in the second half. He believes there is just an outside chance of an ECB interest rate cut this year.
