THE CENTRAL BANK OF IRELAND has lowered its projections for economic growth for 2010, with the increase in Gross Domestic Product now expected to reach just 0.2% for all of 2010.

The projection, published this afternoon in the Central Bank’s quarterly outlook for the remaining three months of 2010, is lower than the 0.8% published by the same institution just three months ago.

Gross National Product, meanwhile, is to fall by 1.7% – a similarly-sized dent on the previous expectation of a 1% fall.

Explaining the downgrade, the Central Bank wrote that the difference was due to the collapse of the domestic market and was only being saved by improvements in the export sector, results of which are included in the GDP figure but not the GNP one.

It added, however, that the more traditional segments of the economy – such as the manufacturing sector – seemed to be stabilising and that economic activity would rise if there was more investment in Ireland.

Elsewhere in the report, the bank added further fuel to the suggestions that December’s Budget cuts would need to exceed the previous target of €3bn, saying larger cuts would be required in order to complete the first step to a recovery.