Dublin: Economists warn that Ireland is going to have the worst recession in the State’s history on the breeze and the Covid 19 outbreak.
These concerns are based on the fact that the UK economy is heading for the worst recession in its history, with GDP falling by 20% from April to June.
They share the concern that the country’s economy, ravaged by the Brexit, could be plunged further into the worst recession in history because of Covid-19.
The Irish Financial Advisory Council points out that the economy has shrunk by 21% in April due to the lockdown announced. Last week the Exchequer’s most recent estimates showed a deficit of €7.4 billion in July compared to a surplus of €896 million reported in that month last year.
The nation lost its €8.3bn on increased costs related to Covid-19. Only borrowing can close this huge gap.
The Organization for Economic Co-operation and Development (OECD) has warned that the extra debt incurred by the government, which is already in debt, could put us at risk.
Ireland is one of the most indebted countries in the world, among the developed countries. More than 110 billion euros have already been borrowed.
The International Monetary Fund predicts the global economy’s growth will slow this year to 4.9%.
It will be the largest recession since the Great Depression of the 1930s. As Ireland exports the vast majority of the goods it produces-worth € 152 billion last year-it is going to be badly affected globally by the fall in demand.
Tax revenue in Ireland is lower than expected due to the corona virus. Britain, Ireland’s largest trading partner, is also in recession.
The change is classified as a recession when a country’s economy shrinks for six consecutive months. Although not officially announced, it is clear that Ireland is still in that category.
The rate of new car sales is considered to be indicative of the health of the economy are now back to recession levels.
According to the Irish Society of Motor Industry, the new car market has been in decline since 2016 due to Brexit. As the current Covid crisis intensified, it dropped to the level of the previous recession. SIMI Director General reveals that sales are down 30% so far.
Ireland was holding on to Europe’s highest unemployment pay and benefits in the early days of the pandemic. Which indicates is that the days ahead are not going to be so good.
The Government has already announced thousands of jobs and apprenticeships. However, experts believe that Ireland will be impacted by the downturn in goods and services as part of the global recession.