The European Commission has published its autumn economic forecast in which it says the Irish economy will grow by just 0.9% next year.
The Government's four-year plan published last week projects growth next year at 1.75% - almost double the EU rate. The Commission is predicting a growth rate of 1.9% for 2012, again lower than the Government's projection of 3.25%.
Strong economic growth is needed to cope with the additional borrowing costs which the state is taking on over the next few years.
Overall, the Commission says the European economy will experience soft growth next year, with a stronger rebound in 2012 - but it has sharply revised upwards it estimate for world trade growth from 7% to 12%.
The Commission also admitted 'concern' at the power of financial markets to sow 'turbulence' undermining economic recovery and create further policy-making 'tensions'.
'The financial market situation remains a concern, with further tensions possible, as highlighted by the reappearance of stress in sovereign bond markets lately,' the Commission said.
The data came the morning after EU finance ministers and the International Monetary Fund sealed their second euro zone bail-out of the year, with analysts tipping first Portugal and ultimately even Spain to be the next to need aid in potentially breaking-point emergency rescues.
The commission revealed it was more pessimistic than Portugal and Spain on their respective deficit reduction plans, while warning also of a slowing in the rate of euro zone economic growth next year to 1.5%, before rebounding to 1.8% in 2012.
Similarly, national debt levels for bailed-out Greece and Ireland, plus politically divided Belgium, are each set to rise beyond 100% of GDP, or one year's economic output, in 2012.
The bright spot on the EU's forecast horizon, though, was a projection showing that the unemployment rate should gradually fall to about 9% by 2012, having hit a record one-in-10 during the aftermath of the world's deepest recession since the 1930s.
