The Government has sharply lowered the forecast for Irish economic growth this year, in an update on the economy and the public finances submitted to the European Commission.
The Government said it now expected growth - as measured by gross domestic product - of 0.75% this year. This is a percentage point lower than the forecast set out in December's Budget. The growth forecast for next year was also lowered from 3.25% to 2.5%.
The report said exports were now expected to make a greater contribution to growth, but there would be a smaller contribution from domestic demand, with consumer spending expected to fall again by 1.75%.
The Government has also raised its forecast for the budget deficit this year from 9.4% of GDP to 10%, due to the effect of a weaker economy on tax revenue and the extra cost of restructuring the banks.
The update also expects that unemployment will average 14.5% this year, and points out that this is higher than assumed in the last Budget.
It says interest payments on the national debt will eat up around 15% of tax revenue this year, rising to 21% by 2015. But the report points out that this is lower than the mid-1980s, when the figure was close to 33%.
