The Central Bank of Ireland has lowered the country's economic growth forecast for the next two years as available indicators for the third quarter point to weaker growth prospects.

In its quarterly bulletin published on Friday, the Irish central bank reports that it expects Ireland's gross domestic product (GDP) to rise by 0.5% in 2012 and 1.7% in 2013, effectively cutting its prior forecasts by two decimal points from 0.7% and 1.9% respectively.

For 2013, it expects foreign demand to improve alongside a gradual stabilisation of the domestic economy.

"There has been an improvement in financial-market sentiment, largely on account of further policy measures announced by major central banks," the Irish central bank said. "Nevertheless, the recovery in advanced economies is expected to be subdued, reflecting the ongoing adjustment to imbalances accumulated in the years leading up to the financial crisis."

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