BoI warns of 7% decline in economy this year

CONTINUING downward pressure on global growth will result in a steep 7% contraction of the Irish economy in 2009, the latest review from Bank of Ireland warns.

However, the forecast is a bit more optimistic that the budget forecast on Tuesday for a decline of 7.7%. The bank said growth will be flat next year while the Government has forecast a further decline of 2.9%.

In its review, the bank said the economy contracted 2.3% in 2008, only the third year in the past 50 that GDP has fallen. The current year will deliver another year of recession as output falls by an estimated 7% with 2010 expected to stand still.