Central Bank slashes growth forecasts
THE Central Bank has more than halved forecasts for the country's economic growth.
In a dramatic reassessment, the bank has slashed its predictions from 1.8pc to just 0.5pc for 2012 amid falling demand from consumers at home and for exports.
"Uncertainty remains high, however, and a wide range of outcomes is possible, including one in which the domestic economy is held back by weaker external demand for a longer than expected time," the bank said.
The Central Bank said the significant revision in forecasts was mainly down to the weaker short-term prospects for external demand.
The quarterly review and forecasts warned that Gross Domestic Product, the value of all goods and services, will fall to 0.5pc - down from 0.8pc last year - before increasing to 2.1pc in 2013.
The figure for this year matches the assessment of the International Monetary Fund, European Central Bank and European Commission following their latest review of the country's bailout programme.
The Central Bank previously forecasted 1.8pc growth for 2012 in its October bulletin and 2.1pc in July last year.
The first review of 2012 said that recovery in external demand will kick in from the second half of this year, alongside a gradual stabilisation in the domestic economy.
Taoiseach Enda Kenny said the Government's real priority is jobs and an action plan to ease unemployment would be published in the next fortnight.
"The Government's growth figures are median figures and we are prepared to stand by those," Mr Kenny said.
"(It is) very difficult for anybody to determine what the final growth figure might be but the Government have set out their figures and we stand by that."