A disorderly conclusion of Brexit negotiations could "plunge the Irish economy into a recession", the Organisation for Economic Co-operation and Development has warned.

The OECD said that such a conclusion to Brexit poses the most immediate uncertainty to Ireland's economy. 

In its latest economic outlook, the think tank acknowledges that while new housing completions have been "catching up with demand", there will continue to be shortages in the dwelling stock for some time. 

It noted that despite having moderated recently, property prices remain high and foreign investors account for more than half of commercial property investment in Ireland. 

"They often obtain funding from outside the Irish banking sector, but they still leave the Irish property market vulnerable to rapid changes in prices and open up new channels for the transmission of external shocks", the OECD said. 

Today's report also said that property prices may surge strongly again.

While this would further boost the construction industry in the near term, the OECD cautioned that it may lay the foundation for another "boom-and-bust cycle" is associated with another surge in credit growth.

The OECD report contains analysis and projections for its 36 member countries and other major economies.

It said that changes in the international tax regime could affect Foreign Direct Investments by multinational firms, which would pose a significant risk for Ireland. 

Irish economic growth, according to the OECD, is projected to remain "robust" but to ease gradually to 3.9% in 2019 and 3.3% in 2020.

OECD cuts global growth forecast as US-China tensions rise

Meanwhile, the OECD today cut its forecast for the world economy, urging governments to resolve their trade disputes as the latest flare-up in the China-US trade war threatens to crimp global growth.

"Governments must act urgently to reinvigorate growth that benefits all," the Organisation for Economic Co-operation and Development said as it pared back its forecast for global growth to 3.2% this year from 3.3% earlier. 

"Resolve trade disputes through increased international cooperation while fixing the international rules-based system," the OECD said. 

"Invest in infrastructure, digital transformation and skills to meet tomorrow's challenges. In the euro area, combine structural with fiscal policies to stimulate activity," it added. 

The OECD's updated forecasts did not take directly into account the latest flare-up in the long-running trade war between the US and China, "in sofar that there is still a great deal of uncertainty about the length of time (tariffs) will remain in place and the future evolution of the trade relationship between the two countries," an OECD source said. 

Nevertheless, the projections did "incorporate" the increased uncertainty generated by the trade tensions, the source said.  

As both Washington and Beijing slap trade tariffs on more and more of each other's goods, President Donald Trump has barred US companies from engaging in telecommunications trade with foreign companies said to threaten American national security.

US internet giant Google, whose Android mobile operating system powers most of the world's smartphones, then announced that it was beginning to cut ties with China's Huawei, which Washington considers a national security threat.

While the OECD pared back its global growth forecast for the current year, it predicted a pick-up in activity to 3.4% next year. 

It notched up its forecast for US growth this year by 0.2 percentage point to 2.8%, but predicted a slowdown to 2.3% next year. 

Chinese growth was projected to slow to 6.2% this year and 6% next year.  

The OECD's outlook for the euro area growth was unchanged at 1.2% this year.