The International Monetary Fund on Friday slashed its growth forecasts for Ireland after predicting weaker consumer demand and export growth for the bailed-out eurozone nation.

The IMF, which formed a central part of Ireland's international rescue in 2010 that was worth 85 billion euros, said it expects Ireland's economy to grow by 0.6 percent this year compared with a previous forecast of 1.1 percent.

It added that gross domestic product (GDP) was forecast to expand by 1.8 percent next year compared with the Fund's earlier prediction of 2.2 percent.

"The growth projection for 2013 has been pared back by a half-percentage point to 0.6 percent year-on-year," the IMF said in its latest report on Ireland.

"Most importantly, export growth has been cut by 1.5 percentage points."

It added: "Weaker consumption and export growth are expected to dampen the pace of recovery, with growth now pencilled in at 1.8 percent in 2014."

The nation's economy has benefitted in recent times from solid exports. Its trade surplus widened by 8.0 percent in July from June as exports grew faster than imports, recent official data showed.

The downgrades come despite Ireland exiting recession in the second quarter with economic growth of 0.4 percent thanks to solid expansion of its construction and export sectors.

Ireland fell into recession in late 2012 but returned to growth in the three months to June of this year, official data revealed last month.

Ireland was rescued with a massive bailout from the International Monetary Fund and the European Union in late 2010.

Its economy had been through a period of turmoil in the run-up to the 2008 global financial crisis and after, amid soaring government debt, a property market meltdown, banking crisis and surging unemployment.

Ireland is meanwhile set to unveil another painful austerity budget later this month.

Ireland had been known as the 'Celtic Tiger' economy for its double-digit growth spanning a decade from the mid-1990s.