TAOISEACH (prime minister) Brian Cowen has been under attack following a devastating official prediction that Ireland is heading for recession this year - the first in a quarter of a century.The government's economic advisory group, the Economic and Social Research Institute (ESRI), said the economy will contract by 0.4 per cent this year after growing by 4.5 per cent last year.In addition, the "think-tank" predicted, there will be net emigration next year for the first time in many years with an anticipated outflow of 20,000 people as the numbers searching for work overseas rise. The level of unemployed, currently running at 5.3 per cent, is expected to top seven per cent and, but for the expected rise in emigration, would probably reach eight per cent.As if to underline the crisis the ESRI report coincided with an announcement by the country's largest insurer, Hibernian, that it is cutting 580 jobs in Dublin, Galway and Cork and relocating the work to India.The Opposition wasted no time in rounding on Cowen. Fine Gael spokesman on finance Richard Bruton described the ESRI report as a "damning indictment" of Cowen's own record as Finance Minister prior to his promotion on Bertie Ahern's resignation earlier this year.Bruton said the legacy of Fianna Fil's 11 years in power is a country where "rip-off prices" are the norm and where frontline services are being slashed.He raged that Cowen's "neglect" turned a $3.11 billion surplus into a deficit of $12.5 billion. The government's room for manoeuvre in the public finances had been totally destroyed.He accused Cowen - when he was Minister for Finance - of expanding spending in the years before the last general election on the back of an unsustainable property boom.Labour Party Deputy Leader Joan Burton said the government had to acknowledge the scale of the problems facing Ireland's economy.She said the ESRI's warning about the need to avoid a rapid correction in the exchequer position must be heeded, but that urgent action needed to be taken on the issue of job losses in the construction and manufacturing sectors.Sinn Fin's spokesman on Economic Affairs, Arthur Morgan, said there was little public confidence in the ability of the government to manage the current economic difficulties. He warned that "there must be no repeat of past mistakes such as the severe cutbacks in public services in the 1980s that we are still feeling the impact of today." Morgan added: "The deterioration in the public finances has been stark and is a cause of great concern." According to the ESRI, economic growth is expected to resume next year with a forecast expansion rate of 1.9 per cent. But, the report warned, this would not be enough to stem a recurrence of net emigration in 2009, with the 20,000 people leaving the country next year reaching a level not seen since 1990.From an overall budget surplus of $8.11 billion in 2006, the government is expected to incur a deficit of $11.55 billion in 2009, a turnaround of more than $19.6 billion in the space of three years. Finance Minister Brian Lenihan acknowledged that "resolute, prudent and determined" action will be needed.Independent economic experts Ide Kearney and John Fitzgerald advised that, if handled correctly, the economy should still bounce back in 2010 and beyond.They said that in spite of a serious loss of competitiveness in recent years, trade in 2007 made its largest contribution to the overall growth rate since 2002 and net exports will add significantly to activity again this year.They added: "It is this resilience that gives promise of better things to come after 2010. The growth in exports, and hence output, is predominantly in business and financial services."Despite the shock of the ESRI report, many business leaders said they weren't at all surprised at the announcement of a recession.One senior manager in the North West, likely to be hit harder than any other region, said: "We could have told them that as far back as February."Work forces are being slashed to save costs, particularly in construction. IBEC, the employers' lobby body, is encouraging businesses to seek savings by using at least 10 per cent less energy.