Business leaders have become more pessimistic about economic recovery this year because of an expected dip in consumer spending.
Ibec, which represents thousands of employers, predicts some growth in the coming months but believes it will be less than predicted earlier this year.
In its quarterly forecast, it blamed a drop in spending, higher than expected inflation, unemployment and interest rate hikes for the gloomier outlook.
Fergal O’Brien, Ibec’s chief economist, appealed for the Government to look at “pro-enterprise” measures introduced recently in Britain as possible solutions for Ireland.
“Business remains concerned about the sustainability of the public debt burden, but this situation will stabilise if the government prioritises jobs and enterprise growth,” he said.
“Businesses and consumers desperately need a confidence boost from the upcoming jobs initiative. The Government should look at some of the measures in the recent UK budget, which delivered some optimism for businesses despite a similarly difficult public finance situation.”
Ibec said the economy should grow by 1.3 per cent this year, down from the 1.8 per cent it predicted a few months ago.
However, the organisation said it remains confident on the outlook for growth in exports and business investment in plant and machinery.
