Davy Stockbrokers have revised their forecasts for the Irish economy.
They now expect GDP growth of 0.2% in 2012 and 0.9% in 2013, revised down from their last projections in January for 0.4% growth in 2012 and 1.6% in 2013.
GNP is expected to contract by 0.6% in 2012 and be flat in 2013, and domestic demand to contract by 2.2% in 2012, and 0.6% in 2013.
The company said that although the euro-area recession they had expected in January has materialised, it now appears that demand for Irish exports in 2013 will be weaker than they had expected.
They say that a key factor driving down their forecasts for the Irish economy is a slower recovery in exports, now forecast to grow by 2.6% in 2012 and 3.2% in 2013.
This slowdown is already evident in the data, with annual export growth of 2.4% in the year to Q2, down from the 5% growth recorded for the calendar year 2011.
A key feature of the Irish economy in 2012 was the divergence between GDP, up 1.4%, and GNP, down 2.5%.
The growth of the economy has been concentrated in the multinational sector, where recorded productivity per worker is exceptionally high, but corresponding labour demand weak.
Conditions in the SME and traditional manufacturing sector remain weak. This means that despite two positive years of GDP growth, they see little prospect of a significant improvement in labour market conditions, with employment set to fall 0.8% in 2012, and rise 0.3% in 2013.
They expect the Government to hit its target of a 7.5% deficit.
