The employers' group IBEC says the recession in Ireland probably ended in the first quarter of this year, and the economy is slowly returning to growth.
IBEC says the weaker euro and stronger than expected consumer demand are helping the economy to recover, and it has revised its forecasts for this year and next year upwards.
In March, IBEC forecast that GDP would shrink this year by 0.7%. It has now revised that to a drop of 0.1%. In other words, the size of the Irish economy will be virtually the same as last year - although GNP - which excludes profits from foreign multi-nationals - is forecast to fall by a further 1.5%. IBEC also raised its 2011 growth forecast from 2.1% to 2.3%.
A stronger than expected recovery in global markets, and a significantly weakened euro have provided Ireland's exporting companies with a much more favourable business environment, according to IBEC, which believes 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.
But it warns that the emerging recovery here and elsewhere could be choked off if financial market stress over Europe's debt crisis continues for a number of months.
