Huge economic fallout predicted
by Bernard Harbor
 

Over 350,000 people could lose their jobs if current coronavirus-related restrictions and closures stay in place for 12 weeks, according to the Economic and Social Research Institute (ESRI).

 

This would push the unemployment rate to 18% in the second half of this year, up from less than 5% in the first three months of 2020.

 

The report was published as social protection staff processed over half a million individual transactions last week. This included 283,000 pandemic unemployment payments and over 200,000 standard jobseeker payments.

 

Describing the pandemic as the “greatest threat that the Irish economy has faced since the financial crisis,” the ESRI also warned that State finances will be hard hit.

 

It envisages a significant fall in revenue as economic activity stalls, coupled with extra health spending to deal with Covid-19 and the soaring costs of supports to laid-off workers and struggling businesses.

 

The economic think tank suggests that the economy could shrink by over 7% this year on foot of reduced household spending, cancelled and postponed business investment, and falling overseas demand for Irish-produced goods.

 

It says the labour market had been strong prior to the pandemic. But was now facing “the largest one quarter shock in living memory.”

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