BoI lowers 2012 growth estimate to 0.8% on consumer spending fears

Bank of Ireland has marginally downgraded its 2012 growth forecast for the economy, from 1% to 0.8%, due mainly to worsening consumer spending patterns.

In his latest quarterly economic outlook, published yesterday, the bank’s chief economist Dan McLaughlin said an expected 2.2% annual drop in consumer spending and a potential weakening in both export and import levels resulted in the downgrade. However, he has maintained his outlook for next year: “We had forecast a 1.5% expansion for 2013 and are still inclined to retain this projection, although the economy’s dependence on exports means that the risks are clearly on the downside, given the uncertain global environment, notably in the eurozone.

“Domestic demand is expected to fall again, albeit modestly, given the prospect of another deflationary budget.”