The Irish Central Bank released a statement toady revising down its growth forecast for this year by more than half, as the government tighten its spending and impose budget cuts to slash debt.

The bank expects the economy to expand by 1.0 percent, compared with earlier projections of 2.4 percent in October, adding that the expected growth rate in 2012 reaches 2.3 percent.

The prospects for the Irish economy for this year and next have deteriorated in recent months, the central bank said. Domestic demand will weigh more heavily on growth this year and next than was anticipated.

The government revealed its intention to slash spending by increasing taxes by €6.0 billion, while the Finance Prime Minister Brian Lenihan plans to impose a tough budget cut after acquiring €85 billion in rescue fund from the European Union and the International Monetary Fund.

The debt to GDP ratio in Ireland reached 12.0 percent in 2010, including the cost of bank's bailout, where the deficit amounted to 32.0 percent of GDP. Ireland government aims to slash the deficit to 3.0 percent by 2014.