Ireland's central bank has said on Friday that it expects the country's Gross Domestic Product to grow 1.2 per cent in the financial year.

The central bank had predicted a growth of 1.3 per cent three months ago. It kept the growth forecast for 2014 unchanged at 2.5 per cent but warned the government that the austerity programme must be implemented properly. The central bank noted that the country's gradual economic recovery is on track but warned that the government must work to make progress in the

Meanwhile, the International Monetary Fund has warned over the uncertainty facing the Irish economy by pointing out that the country's banks have not been able to make significant progress and country's debt might become if growth forecast are not met. The IMF criticised the banks in the country for not improving the way in which they deal with the non-performing assets.

The sixth review of Ireland's bailout programme also pointed out that the banks in the country are losing money even before setting aside resources for covering non-performing assets in the country.

The global body said that Irish banks are just beginning to tackle the problem of non-performing loans. It noted that the repossessions were at just 0.3 per cent of total mortgage arrears in the year 2012.