• House prices predicted to fall further 10% from peak • National debt forecast to reach 113% of GDP by 2013 • Exports set to grow, but domestic economy stagnant

This article is more than 9 years old

This article is more than 9 years old

Ireland's recovery from its fiscal crisis throughout 2011 will fail to create any jobs, with consumer spending remaining weak, according to a report on the republic's economy, out today.

But despite stagnant domestic demand Irish exports will continue to grow, says the report, by Dublin financial services firm NCB.

The Republic will need further assistance from the European Union to help it with entry to the permanent European stability mechanism – the sovereign bailout fund set up during the Greek crisis, the authors of the report say.

With the economy being the main focus of campaigning ahead of the Irish general election on 25 February, NCB also warns that house prices will continue to fall. The property crash was one of the main factors that plunged the republic's banking system into chaos, forcing the Dublin government to bail out the banks with billions of Irish taxpayers' euros. In addition a large part of the €80bn-plus rescue package from the IMF and European Central Bank will also be used to shore up the debt-ridden Irish banks.

House prices could fall a further 10% from their peak in the property boom of the first half of this decade, the report predicted.

"House price declines in Ireland are not over," says the report.

Overall the forecast makes grim reading for campaigning politicians.

The NCB report predicts the National Assets Management Agency – the body managing the country's toxic property assets – will continue to exert a major influence on the housing market.

On consumer spending the report identifies those aged 20-45 as least likely to spend further. This is partly due to rising numbers of people in that age group leaving the country, also to the fact that they were a large proportion of those who took out big mortgages just before the property crash.

Projections for Irish gross debt remain staggering, with the report forecasting it will rise to 113% of GDP by 2013.

NCB identifies a number of state assets that could be sold off to help plug the gap in Ireland's public finances, including ports, forests and state energy companies.

The forecast is not completely bleak. NCB predicts Irish exports will continue to increase, after record 10% growth in 2010. Despite foreign direct investment declining globally last year by 8%, in Ireland it increased significantly in 2010.

One of the main reasons for Ireland's continued attractiveness to foreign firms is the republic's low rate of corporation tax. NCB says it believes the 12.5% tax rate is safe despite demands from some EU states that it be raised to the level of other European nations.