By Andras Gergely
DUBLIN, Aug 31 (Reuters) - Economists cut their economic growth forecasts for Ireland for the next three years, projecting slower expansion than assumed in the government's planned fiscal reform trajectory, a Reuters poll showed on Tuesday.
The median forecast of 10 analysts polled by Reuters was for a 0.7 percent rise in gross domestic product in 2010, below the 0.8 percent seen in last month's survey and the government's 1 percent projection.
For next year, economists see an expansion of 2.7 percent, down from 3 percent in the last survey and with only the most optimistic of the 10 participants matching the finance's ministry's 3.3 percent estimate.
With the ministry expecting average growth of 4 percent between 2011-2014, the timeframe set out to bring the budget deficit in line with EU rules, analysts' consensus figure for 2012 is still somewhat short of that at 3.7 percent.
Ireland officially emerged from the euro zone's deepest recession this year but a genuine recovery cannot happen until the haemorrhage of repeated bank bailouts is stopped and Ireland can shake off the image of a euro zone troublespot.
The government says that, "one-off" bank rescue funds notwithstanding, the "underlying" budget deficit is on track to fall to 3 percent of GDP by 2014 from 14 percent in 2009.
The International Monetary Fund has warned however that slower-than-forecast economic growth was also a key risk for the fiscal reform plans.
"The massive bank bailout programme is essential if credit conditions are to loosen," said Melanie Bowler at Moody's Analytics in London. "Reluctance to lend is hindering the recovery in the Irish economy."
On a median basis, analysts expect this year's budget deficit to come in at 12.1 percent of GDP, slightly above the official 11.5 percent target.
Views differ however on the accounting of funds earmarked for nationalised Anglo Irish Bank and Irish Nationwide Building Society, and therefore economists' projections for the 2010 deficit ranged from 11.5 to 21 percent.
"A better measure of the Irish public finances at this stage is the exchequer borrowing requirement which is the actual budget deficit that has to be financed each year," said Oliver Mangan, chief bond economist at AIB Global Treasury.
According to the median of 8 respondents, the exchequer deficit is forecast to fall to 19 billion euros this year from 24.6 billion in 2009, which was double the corresponding 2008 figure. (Additional reporting by Padraic Halpin and Carmel Crimmins; editing by Stephen Nisbet)