Bloxham Stockbrokers has revised downwards its forecast for the Irish economy.

Bloxham said the improving economic picture in the US is a promising development for Ireland, but the overall uncertainty over the world economy, and the euro zone in particular, is likely to weigh negatively on the country's growth prospects this year.

It said Ireland's economic recovery will slow in 2012 as a result of weakening export demand. Bloxham now projects real GDP growth of 0.5% compared with its previous forecast of 1.1% at the beginning of the year.

It added that the risks are ''still clearly tilted to the downside at this stage given the uncertain global backdrop and the outcome of the upcoming referendum on the EU fiscal treaty''.

The stockbroker said there was little to be optimistic about as regards the Irish consumer or personal spending in the immediate future. Bloxham stressed that employment growth would restart only when consumer spending started to pick up again. Bloxham predicts an overall fall in spending of 2.6% in 2011, while households will remain cautious during 2012.

On the Anglo Irish Bank promissory notes, Bloxham said it was confident Ireland will win a better deal on the notes, but not before the referendum on the fiscal treaty. It said it believes a ''no'' vote would cast doubt over the country's commitment to the euro and trigger a credit ratings downgrade, which would also likely affect the country's chances of returning to bond markets for the foreseeable future.

Bloxham said that after a drop of almost 13% last year, house prices are now expected to experience another double digit decline this year. It also said that another rate cut from the European Central Bank is off the table for the time being at least, as the bank signalled a policy change in its latest meeting.