Jack Quann
Jack Quann

07.27 3 Apr 2020


Share this article


The Central Bank has warned the coronavirus has triggered a severe negative shock to the Irish economy.

In its quarterly bulletin, it says this is "fundamentally different" in nature and scope from anything previously seen.

"Given the uncertainty of the situation, it is not possible to produce a conventional forecast," the bank says.

Instead it looks at judgement and draws on a range of analytical tools.

The bank says based on the assumption that containment measures and restrictions remain in place for a three-month period before being rolled back, GDP could decline by 8.3% this year.

Central Bank Source: Central Bank of Ireland

In this scenario, the unemployment rate could rise to around 25% in coming months.

On the assumption that both domestic and global economic activity begins to recover in the second-half of the year, the unemployment rate could then begin to move gradually lower.

But the bank says it may still remain "relatively high and in double figures" by the end of the year.

It says COVID-19 has resulted in the widespread shutdown of businesses, mainly in the market services sectors of the economy, with labour-intensive sectors - such as retail trade, food and beverage, accommodation, tourism and travel - particularly affected.

Central Bank Source: Central Bank of Ireland

Numbers released on Thursday for the Live Register showed over 500,000 signing on or receiving income supports.

Further job losses are also possible.

On the external side, the bank says the exports of indigenous firms are likely to be "adversely affected" by the sharp decline in external demand.

But, as was the case during the financial crisis, there may be some offset to this from the performance of exports of pharmaceutical products and medical devices.

It says these sectors are likely to be less negatively affected by weak external demand.

Central Bank Source: CSO/Central Bank of Ireland

Mark Cassidy is director of economics and statistics with the Central Bank.

He says: "It is important to stress that due to the nature of this pandemic and the ongoing uncertainty it is not possible to produce a conventional forecast on the outlook for the Irish economy.

"However, the near-term outlook for the economy is very unfavourable and, beyond that, the path ahead for economy depends on the path of the virus, both domestically and globally.

"The starting point for the recovery will depend on the depth and duration of the downturn, which is, as yet, unknown, though the hope is that forceful containment measures can shorten the period during which economic activity has come to a stop.

"When it emerges, the pace of recovery is likely to depend on factors such as the extent to which households and firms have been scarred by the downturn, the degree to which precautionary behaviour unwinds, the recovery in employment and incomes and, possibly also, the degree of stimulus in place to provide some impetus to recovery."


Share this article


Read more about

Central Bank Central Bank Of Ireland Coronavirus Forecast GDP Quarterly Bulletin Unemployment

Most Popular

Live: Title

Now playing

00:00:00 / 00:00:00
Added to queue
Removed from queue

On Air

Share

Share


Up next

Episode title
Show
Duration

You currently have no podcasts in your queue.

Go to podcasts

On Air

The Hard Shoulder

The Hard Shoulder

16:00-19:00

Share

Up next

OFF THE BALL

OFF THE BALL

19:00-22:00

Share

SPLANC

SPLANC

22:00-00:00

Share

BEST OF NEWSTALK

BEST OF NEWSTALK

00:00-07:00

Share

IN CASE YOU MISSED IT

IN CASE YOU MISSED IT

07:00-08:00

Share

NEWSTALK BREAKFAST WITH SUSAN...

NEWSTALK BREAKFAST WITH SUSAN KEOGH

08:00-09:00

Share

THE HOME SHOW WITH SINEAD RYAN

THE HOME SHOW WITH SINEAD RYAN

09:00-10:00

Share

DOWN TO BUSINESS WITH BOBBY KE...

DOWN TO BUSINESS WITH BOBBY KERR

10:00-12:00

Share

FUTUREPROOF WITH JONATHAN MCCR...

FUTUREPROOF WITH JONATHAN MCCREA

12:00-13:00

Share

OFF THE BALL

OFF THE BALL

13:00-17:00

Share

TECH TALK WITH JESSICA KELLY

TECH TALK WITH JESSICA KELLY

17:00-18:00

Share

SCREENTIME WITH JOHN FARDY

SCREENTIME WITH JOHN FARDY

18:00-19:00

Share

00:00:00 / 00:00:00

Share on