Growth in exports will underpin the economy's recovery, according to a new forecast by Bank of Ireland.
'The volume of exports is anticipated to pick up as 2010 unfolds and we have pencilled in a 3.5% rise for the year as a whole,' according to Group chief economist Dan McLaughlin. In contrast, however, the bank expects imports to fall by 2%.
Overall, the bank's Quarterly Economic Outlook forecasts growth of 1% for this year, which is more positive than the Government's forecast of around -1%.
McLaughlin, who authored the new report, believes that the Irish economy is stabilising. GDP fell by 0.3% in the six months to September - but in the six months to March 2009 it plunged 7.5%.
But while the recession may be ending, and Ireland's main markets are growing again, the real income of Irish residents (as measured by GNP) contracted by 1.4%.
The record low interest rate and falling consumer prices have provided some support for personal incomes, McLaughlin said, but households appear to have reduced spending by more than the fall in disposable incomes.
