Economy ‘may shrink by 1.5%’

Dublin: Ireland’s economy may shrink by 1.5% this year and house prices will continue to decline, ratings agency Moody’s said.

“The Irish economy has been acutely impacted by the recession and Moody’s believes that there has been damage to Ireland’s growth engine to the extent that growth potential has been impaired,” Moody’s said in a report. It also said mortgage arrears will probably increase.