Consulting group Ernst & Young has raised its forecast for growth in the Irish economy this year, but lowered the outlook for 2012.
Its Economic Eye report predicted that gross domestic product (GDP) would rise by 1.2% this year, the first increase since 2007. But it lowered its growth forecast for next year to just 0.5% from a previous 1.1%.
It also warned that the second half of this year would be weaker than the first half, and that the Irish economy could even slip back into recession.
E&Y said the domestic economy and employment continue to decline, and its latest forecast had also downgraded growth prospects in important export markets.
"Given the extent to which the Republic of Ireland currently relies on rising global exports to drive economic growth, this is bound to impact overall economic performance in 2012," said economic advisor Neil Gibson.
The report also warns that although unemployment levels will begin to fall from 2013, pre-recession employment levels will not be reached until 2030.
"Job opportunities created in the next decade will not all necessarily align to the skills of those currently out of work, leaving an employability challenge that is likely to last a generation," the E&Y says.
The Economic Eye forecasts for the Northern Ireland economy have also been lowered for 2011 and 2012 to 0.8% and 1.1% respectively.
