Financial markets are relatively upbeat about Ireland’s prospects, according to a new report on the Irish economy from Barclays.
That conficence comes from the country's assiduous implementation of reforms, both before and under the EU/ECB/IMF programme, the report said.
It said though, that despite good progress to date, the road to recovery is long and unlikely to be easy.
It also said while the banks may now be well capitalised, they are unprofitable and continue to rein in credit.
Property prices are still falling, arrears increasing, unemployment high and external demand weak and the macro-financial backdrop is "highly unsupportive".
The public deficit is expected to be more than 8% of GDP this year, making the plan to cut it to 3% by 2015 an ambitious one, it stated.
Barclays' report said that a prolonged period of weak GDP growth is the biggest concern it has about the economy.
It said that Ireland’s recovery remains highly dependent on strong exports and a stable financial environment. Weakness in domestic demand needs to be arrested, both to ease the pressure on the public finances and the banks, it added.
The report said thats Irish authorities have little influence over the evolution of the euro crisis, and the strength of global activity more generally, and yet these will be crucial determinants of the ease with which Ireland can stabilise and recover.
