The Economic and Social Research Institute has warned that Ireland is facing into its first economic recession since 1983.
In its latest assessment, the ESRI says it now expects GNP to fall by 0.4% this year, with unemployment set to hit 7% by next year.
It is also predicting a return to net emigration, with 20,000 people expected to leave the country next year in search of work abroad.
The ESRI says the difficulties are emanating from the housing sector, but will affect all sectors of the economy.
Labour Party TD Joan Burton says the Government must take the blame for the situation due to its mismanagement of the housing market in recent years.
"They took the brakes off, they encouraged speculation and they encouraged a housing boom that was both unrealistic and unsustainable," she says.