Economist David McWilliams has warned that Ireland is headed for a "creeping, short recession".
However, even with interest rates rising and an alarming increase in global inflation this year, Mr McWilliams said our immediate economic future isn't "half as extreme" as the global crash of 2008.
"I don't think it is going to be anything as extreme as the case in 2008 and 2010 when there was mass, mass emigration of a whole blue-collar class in Ireland," he said on his podcast, explaining that the country's finances are in different shape now.
"In 2008, we experienced what is called in economics a balance sheet recession. So, what actually happened was because the balance sheet was so leveraged to property... that on the asset side of the balance sheet you had houses and on the liability side - this is the national balance sheet - you had debt.
"And once house prices started to fall by 10%, 15%, 20% and then by 50%, the asset side of people's balance sheet was down 50% but the debt side stayed the same, and, because interest rates were positive, the debt side actually increased.
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"The collective balance sheet of the country collapses which means that it takes ages and ages to get out of that, because you basically have to wait for house prices to rise again.
"We are not looking at that now. What we are looking at now is much more akin to a short recession. Not particularly a shock but a creeping, short recession," he continued.
Mr McWilliams went on to explain that a recession doesn't have to be a "big shock" to the economy.
"People always feel there has to be a big shock to the economy for a recession to happen but what they don't appreciate is that economics, as we say at the very top of the show every week, is about human nature.
"Humans are a social, playful, gossipy animal and what tends to happen is that humans infect each other with confidence and infect each other with depression when it comes to the economic cycle.
"How this manifests itself is that prices fall very, very quickly. People increase their savings so the savings ratio of the country goes up. People temper their spending. If everybody in the economy is tempering their spending, that causes the demand in the economy to crater and you get what looks like a recession," he explained.
He said we are heading for an economic downturn, but reassured listeners that the country's important fiscal metrics, such as the debt to GDP ratio, are "not out of whack", meaning that a "soft" recession is more likely.
"As long as the key metrics are not out of whack, we tend to get these soft recessions and I think that is what we are going into now," he said.
"The first metric is debt to income ratios, which we know as debt to GDP or GNP ratios. The basic rule of thumb is that if they are over 100% then your growth rate has to be higher than your real rate of interest...
"Our debt to GDP ratio is actually very low. People will find this very hard to believe because actual Government spending has been increased to about €100billion a year from about €80billion before the pandemic."
He added that the country's books are in good shape because people "have been paying down debt at a phenomenal rate" since the end of the Celtic Tiger 15 years ago.
