Bloxham economist Alan McQuaid has lowered his forecast for growth in the Irish economy this year, saying a weaker than expected recovery in the US could hit Irish prospects.
In his quarterly outlook, the economist predicts that gross domestic product (GDP) will grow by just 0.75% this year, down from a previous 1% estimate.
He says that although exports will lead any Irish recovery, consumer spending accounts for around half of GDP. Mr McQuaid says consumers need to be encouraged to spend, not save, and suggests some form of SSIA scheme in reverse.
But he warns that inflation could average close to 3% this year, putting even more pressure on consumers.
The economist also believes yesterday's ECB interest rate rise will be the last this year, but house prices will continue to fall due to a weak labour markets and a lack of credit from banks.
