Goodbody's has revised downwards its forecast for growth in the economy this year. The stockbroking firm says weak exports led to the downward revision from 1.6% to 0.7% for 2013.
However Goodbody's says it is nothing more than a speedbump with underlying factors remaining positive.
It says that the underlying slow recovery remains intact, "with notably more positive signs coming through in employment and the housing market".
It explains that disappointing Q1 and weak exports has led to a cut in the GDP growth forecast.
"Exports are the key driver reflecting general weakness in Ireland’s euro trading partners and industry-specific factors. These headwinds reverse in 2014 leading to 2.4% growth". That is down from 2.6%.
But the firm adds that there are clear signs that the domestic economy is improving - albeit at a slow pace.
"Employment has grown for three consecutive quarters and house prices are rising. These underpin our view that domestic demand will grow in 2014 for the first time since 2007".
It adds that any reduced austerity should be funneled towards capital spending; saying that an estimated €1.3 billion undershoot to the Troika budget deficit target in 2014 leaves room for manoeuvre on the €3.1 billion target.
Chief Economist with Goodbody's Stockbrokers is Dermot O'Leary.
