GNP is forecast to fall by 1.5 per cent this year while GDP will be almost flat, according to a revised forecast issued by Davy Research.
The firm said the rate of economic decline has slowed but adds that growth prospects for the economy "remain subdued."
Davy economists predict that GNP will decline by 1.5 per cent in volume terms in 2010 and will regain 1.2 per cent next year. GDP will be almost flat in 2010, managing a mere 0.3 per cent growth. However, next year, GDP volume growth of 1.9 per cent is expected for 2011.
Davy said the 7.2 per cent annualised volume growth of exports in the first half of 2010 "is unlikely to be repeated in the face of currency headwinds and a possible turn in the global inventory cycle," but added that "momentum remains strong."
Continued falls in consumption will delay recovery and Davy expects exports will be the only positive contributor to growth in the near future.
Export growth volume of 4.9 per cent is predicted for next year, compared with 6 per cent previously.
Unemployment is expected to remain high due to the sluggish economy and the multi-year fiscal adjustment is likely to keep the savings rate close to the 10.1 per cent level recorded in 2009.
Consumption expenditure growth will once again be negative in volume terms next year, the firm said.
The forecast suggest that consumption will post a volume decline of 0.8 per cent in 2011 following this year's projected drop of 1 per cent.
"Aggressive fiscal consolidation will limit growth in 2011 but will enable a stronger recovery thereafter.
