The Northern Bank has lowered its forecast for economic growth in NI 2010.
The bank had predicted a growth of 1%, but has lowered that figure to 0.8%.
However, it said the Northern Ireland economy only had a 20% chance of falling back into recession.
The bank's chief economist, Angela McGowan, said they while downward revisions were disappointing the "economy is still in recovery mode and the chances of falling back into recession are now just one in five".
The quarterly forecasts published by Northern Bank also predicted a 2% growth for 2011.
"Northern Ireland has the potential for sound economic growth in the long-term through growing our private sector but without doubt growth in the short-run will be weak," said Ms McGowan.
"It will of course mean that the necessary adjustment to a new equilibrium, in terms of public/private sector balance, will not be without some difficulties."
The report found that the falls of late 2008 and early 2009 appeared to be over.
"Although building supplies and construction-related manufacturing remain muted, those sectors such as food production, electronics and pharmaceuticals continue to provide strength," she added.
"Business services, with the exception of real estate, are holding up well and the prospects for this sector are vital to the overall regional outlook."