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In its latest quarterly bulletin the Central Bank of Ireland predicts that employment will fall further in 2010 with prospects for domestic demand remaining subdued but repeats forecasts for a modest upturn in the economy in the second half of 2010.
The Bank said that the fall in consumer demand was continuing to moderate, with both retail sales and sentiment indicators showing some signs of stabilisation.
Falling employment and income is still reducing consumer spending. The Bank predicts unemployment will fall to 13.2% in 2011 compared to 13.7% this year. Unemployment is expected to peak at 14% later this year.
The bulletin noted that Ireland's economy is heavily dependent on external performances and predicted moderate export growth for 2010.
Central Bank Assistant Director of General Economic Services, Maurice McGuire, said " there had been no signs of 'contagion' for the Irish economy as a result of the Greek crisis, but that the situation emphasised the need for the Irish government to stick to its adjustment plans and 'broadly state' what additional measures they would take if economic activity turns out to be lower than projected."