The outlook for economic growth has been dampened by the latest trade statistics from the Central Statistics Office (CSO). These show that exports fell sharply by 11.4 per cent in June, compared with May, when seasonally adjusted.
The balance of exports over imports fell to €1.99 billion, its lowest level in five years. In the first half of the year as a whole, export values have grown by just 0.6 per cent year-on-year, while imports have grown by 8 per cent over the same period.
The latest trade statistics imply that poor export performance will curb growth in the second quarter of the year. The Government is expected to cut its most recent forecast for economic growth - around 5 per cent - today in its mid-year review of the economy, The Economic Review and Outlook.
It is expected that its forecasts for growth will be lowered because of increasing evidence that the economy's performance is weakening.
The Government has planned a general Government deficit of 0.8 per cent of gross domestic product (GDP) in 2005, based on its latest forecast for GDP growth of around 5 per cent for the full year.
John Whelan, chief executive of the Irish Exporters' Association, blamed poor export figures on oil price rises.
"The falling export figures reflect the continued difficulties Irish exporters face from very high oil price pressures impacting on transport costs, energy costs and a wide range of raw material costs."
Analysis by Goodbody stockbrokers suggests that strong demand for transport vehicles during the first half of the year has put upward pressure on imports.
Bloxham Stockbrokers said the exports outlook may worsen.
"Early indications for 2005 are that things are getting worse rather than better," said its chief economist, Alan McQuaid.