Weaker Irish and EU growth predicted

Growth in Ireland and the rest of the EU this year and next will be weaker than previously forecast, according to the European Commission as it warned of increasing weakness in the global economy and especially in emerging markets.

The downbeat autumn forecast said a slow recovery had set in, while it predicted the eurozone economy will shrink by 0.4% this year and 1.1% next year — down from 1.2% forecast in May, while the jobless number is expected to hit 20 million at 12.2% this year.

The subdued growth outlook is likely to increase the likelihood of Ireland looking for a precautionary credit line from the EU’s rescue fund, the ESM. Economics commissioner Olli Rehn said they were waiting for signals from Dublin on their decision.