IRELAND’S NATIONAL economic thinktank has significantly lowered its expectations for economic growth for the coming year, reducing by a third its expected growth in economic output.

The latest quarterly economic bulletin from the Economic and Social Research Institute estimates that economic growth – as measured by Gross Domestic Product, the overall value of Ireland’s economic output – would grow by 1.5% this year.

That total, although a welcome shift from the dramatic shift in Ireland’s economic fortunes in more recent years, is well down from the 2.25% estimate that the same body offered just three weeks ago.

The downward revision in the economic estimates mean that the new expected rate of growth is lower than the estimate provided for in the government’s Four Year Plan, which targeted a 1.75% growth in GDP this year.

Shortly after the plan was released on November 24, a report from the European Commission instead estimated that Ireland’s growth in GDP for this year would be 0.9% – forcing the government to play defence on its own estimates.

The quarterly bulletin also suggested that the level of national debt would account for a greater chunk of GDP by next year than had even been estimated by the government in its budget just six weeks ago: the new estimate is that debt will account for 104.5% of GDP, as opposed to

Elsewhere, the latest quarterly forecast also predicted that the number of people at work over 2011 would be 24,000 lower than estimated just three months ago – with employment expected to average out at 1.83 million, down by 1.25% on the same amount for the year just gone.

That drop in unemployment would be reversed only slightly in 2012, with just 5,000 net new jobs will be created in 2012. As a result, about 50,000 people are expected to emigrate.

RTÉ notes that this compares unfavourably to the previous peak of emigration, in 1989, when 45,000 left the country in a year.

On RTÉ’s Morning Ireland this morning, Prof Alan Barrett from the ESRI said Ireland’s economy was still somewhat “schizophrenic”, with the growth in the export sector expected to continue, in spite of sluggish domestic demand and stagnant economic growth.