Stockbroker Bloxham has lowered its forecast for the Irish economy next year, predicting growth of just 1.1%, down from its previous 1.5% estimate.
In its quarterly economic outlook, Bloxham says Ireland's recovery will slow next year due to weakening demand for exports, adding that Government may have to take more austerity measures as a result.
The report also forecasts that consumer spending remain subdued next year, falling 1%.
Economist Alan McQuaid warns that the 2012 budget deficit target looks "ambitious", and the Government may need to push through an even harsher Budget for 2013.
He says, however, that Ireland's "healthy and dynamic" export sector means it is in a much better position that other struggling euro zone countries to move forward once world growth picks up again.
On house prices, the report predicts a fall of 14% this year, followed by another 9% drop next year.
Mr McQuaid does not rule out one, or possibly two, further interest rate cuts from the ECB if Europe slips into a serious recession.
Bloxham has also published a report on the stock market outlook for next year, saying it sought out companies which could protect shareholder value in adversity.
It is recommending DCC, FBD, Kerry, Kingspan, Paddy Power and Ryanair.
Bloxham's report also identifies five companies it believes could enhance the reputation of the ISEQ index, while providing them with an equity finance platform. These are Avolon, the Dublin Airport Authority, Glen Dimplex, the Irish Dairy Board and Sisk Group.
