Goodbodys: Economy to shrink by 4% next year

The economy is expected to decline further in 2009, according to Irish stock company Goodbodys.

Goodbody Stockbrokers claims expectations for the economy's health have been reduced in light of the recent turmoil on international finance markets.

The company is predicting that GDP will fall by 4% next year, compared to a drop of 2.5% this year.

Goodbody's Chief Economist Dermot O'Leary has said for the time being the credit crunch is here to stay.

"The economies that are affected most from the leveraging are those economies with higher debt levels - and Irish debt levels have gone to among the highest in Europe over the past 10 years. The short-term outlook is very difficult," he said.