Cooling economy forces AIB to cut growth forecast

AIB HAS cut its economic growth forecast for this year, saying the economy is cooling more than it had previously forecast.

A slowing housing market is one of the reasons for the cut, although the bank does expect house prices torebound over the coming months.

In its latest Irish economic update, the AIB said the economy, measured by gross domestic product (GDP), will expand 2.5% this year, 3.7% next year and 4.4% in 2010 — following a 5.5% growth in 2007.