An economic report from Ernst & Young has predicted that the Irish economy will suffer another sharp fall in output this year.
Ernst & Young's spring economic forecast for the euro zone said gross domestic product in Ireland would drop by 2.3% this year, before returning to growth in 2012. It blamed the fall on a predicted unemployment rate of 15% and a 4.5% fall in consumption this year.
But E&Y economist Marie Diron said the outlook for the Irish economy beyond 2011 was much more positive, due to its strong export performance, and Ireland could have the strongest economic growth in the euro zone by 2015.
The forecast also warned that an expected ECB interest rate rise later this week would be a mistake, and risked endangering a fragile economic recovery. E&Y also forecast that the euro zone would grow by only 1.5% this year and 1.7% next year.
Ms Diron warned that what she called a 'muted' recovery could easily be blown off course by world economic events or an escalation of the zone's debt crisis.
