Bank of Ireland says it is sticking to its forecast that the Irish economy - as measured by gross domestic product - will grow by 1% this year.
Chief economist Dr Dan McLaughlin, in the bank's quarterly economic outlook, said stronger global demand and sterling's weakness would boost exports.
But he said he still expected gross national product (GNP) to fall this year. GNP excludes profits made by multi-national companies based here.
The economist said a range of indicators were now pointing to a broadening economic recovery, and retail sales looked set to record strong growth for the second quarter of this year.
But he said households were continuing to save more, rather than spend, and this trend was likely to continue until employment started to grow. Dr McLaughlin also said construction output and business investment were continuing to fall sharply.
The economist predicted that employment would fall by 50,000 this year, followed by a further 'modest' decline next year. He forecast an average unemployment rate of 13.3% this year, falling to 12.8% in 2011.
Dr McLaughlin also predicted that Exchequer borrowing - excluding bank costs - this year could be lower than expected, helped by lower capital spending, on-target tax receipts and fees for the guarantee on bank deposits, which he said could amount to €1 billion.
