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SIGNS OF IMPROVEMENT in Ireland’s economic fortunes are visible but the trajectory of the recovery remains unclear.
That’s the message from the Central Bank in its latest Quarterly Economic Bulletin, which outlines the impact of the Covid-19 crisis on the Irish economy and the outlook, as it stands, for the next couple of years.
In the report, published this morning, the Central Bank says that economic data suggests the worst of the decline was experienced in April but that the economy has since risen above that low-point.
However, the pandemic is set to shave at least 9% off Irish GDP this year.
Credit and debit card payments nearly returned to 2019 levels in June as restrictions were eased after a precipitous 30% drop in April.
Meanwhile, the unemployment rate fell from peaks of over 25% in April to 22.5% in June.
But although signs of growth in real-time economic data were noticeable in the second quarter of the year, as a result of the phased reopening of parts of the economy, activity remains significantly lower than before the pandemic.
Speaking ahead of the launch of the report, Director of Economics and Statistics at the Central Bank, Mark Cassidy said, “While there is considerable uncertainty about the outlook, the scenarios we present in this Bulletin point to a deep downturn in 2020, with a gradual recovery in coming years.
“The path ahead for the economy will depend on the path of the virus, which makes the strength of the recovery and the future impact on sectors uncertain.”
Gradual recovery
The Central Bank expects to see further gradual recovery as the year progresses.
However, because of the uncertainty caused by the pandemic, researchers plotted the trajectory of Irish economic indicators across two scenarios, one severe and one moderate.
Outlining the latter scenario, in which the gradual reopening of the economy would allow for a rebound in activity in the short term, the Bank predicts that unemployment figures will fall by the end year from the peaks experienced in April.
The unemployment rate hit 25% of the total labour force during the worst weeks of the shutdown but it is forecast to fall to 14.5% by the end of the year. For context, Irish unemployment reached a 13-year low of just under 5% last year.
The Central Bank expects unemployment to drop to about 9% next year and 7% in 2022.
Gross Domestic Product, the total monetary value of all goods and services produced in the country, is expected to plummet in this scenario by 9% this year before recovering 5% in 2021 and 4.5% the following year.
A more severe scenario assumes that the lockdown period was not enough to contain the virus and that severe restrictions will have to be reimposed later in the year.
In this version of the future, unemployment will only fall to 16.5% this year with GDP declining by nearly 14%.
In both scenarios, researchers assumed that some form of free trade agreement will be in place at the end of the current round of Brexit negotiation. If it is not, the Central Bank expects Irish growth levels to be even lower than in the medium to long term.
Economic gap
The latest Bulletin also highlights the uneven impact of the pandemic-related downturn across different regions.
According to the report, the impact has been greatest in areas where employment “has less ‘work from home’ potential and where sectors such as hospitality and tourism are particularly important”.
Analysing the county-by-county uptake in Live Register payments coupled with the government’s pandemic-related support schemes, the researchers were able to plot the geography of the unemployment crisis.
They found that counties with more workers in sectors such as retail, accommodation and food, construction and services”, were the worst affected.
Nationally, an average of 47% of the total labour force was availing of some kind of state support in the second quarter of the year. But counties Dublin and Cork had a much lower uptake of around 40%.
By way of comparison, in counties Kerry, Carlow, Louth and Wexford, closer to 60% of the total labour force was availing of some type of support during the second quarter of the year.
Cassidy, said that it was “reasonable to conclude” that the downturn could worsen the economic gap between rural and urban Ireland.
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I like the idea of having a beer watching a film. Like the Stella class seating
@Michael o Dwyer: Segregation. Nice.
@Michael o Dwyer: I knew the real Michael Dwyer he used to work for the Irish times and enjoy free access to cinema s cross Ireland coz of his work sadly Michael passed away sum years back he would av loved this news
@liam ward: Cinema killed him? Mad!
Pointless as the films are all rubbish these days with only superheroes and marvel bollix. No wonder the kids are soft in the head.
@Buster Lawless: how very dare you.
@Paul Whitehead: feckin xmen 32
@Buster Lawless: fact. Absolute dirt being released for years now.
@Buster Lawless: while I agree with you to a point, they still knock out good movies now and again. Some great directors out there making movies that aren’t superhero based. Even when they are, they can be good. “Logan” is a good example.
@Buster Lawless: Evil does not Exist, Poor Things, All of us strangers, Monster, Teachers lounge….I can add 50 more from this year alone, that are excellent.
There is only one Marvel film released this year which is Deadpool. While there have been 100+ adult themed films released so far this year that are absolutely worth your time.
You’re comment is not just lazy, it’s bland tiresome and entirely uneducated. Take some time in the IFI/Lighthousecinema some time.
@Ted Daly: 2023 is considered one of the 4 best years for film in history.
@neil fanning: do not be swayed by Oscar nominated movies, these are the worst of all.
@Buster Lawless: What are your favourite movies?
Cinema is on its last legs,they are doing all they can to attract, Netflix and sponsors destroying this form of entertainment, unless it’s a Blockbuster folk don’t go anymore, Netflix movies are so bad and cheaply made.
@Phillip Smyth: The biggest turn off for me going to the cinema these days is other people. It’s a shame that what used to be a fun experience is now being ruined by inconsiderate muppets. I’m talking about those who think that it is perfectly acceptable to hold conversations on their phone during the screening. Or frequently with each other at a loud volume, either in groups or couples. Not forgetting latecomers to the film long after it has started, with all the attendant coat-doffing, seat shuffling and bag arranging that entails. And don’t even get me started on loud, rowdy teenagers acting up in the cinema as if they were at home! Basic good old-fashioned manners, cinema etiquette and consideration for others seem to be a thing of the past.
@Phillip Smyth: Whether they’re bad are not is a matter of personal taste, they’re hardly ‘cheaply made though’ .. unless you consider 100m + movies cheap. The Irishman cost them 160m to make .. it was neither bad(imo) nor cheaply made. The fact you can get a monthly subscription and access to all their content for the price of a stand alone ticket to the cinema will have obvious ramifications for cinema. Thats even before we start talking about mobile phone use in the cinema and zero regard for etiquette.. the primary reason I very rarely go anymore.
@Sean May: Spot on Sean.
@Sean May: and then there is all that.
Irishman good story line and great actors just did not do it for me,jmo.
@Brian: the irishman cost 40 million no more
@Buster Lawless: it was well in excess of 160 million. 40. Lol.
@Ted Daly: it was 40 million MAX
@Buster Lawless: this guy is a bit annoying, is he trying to be funny and win friends on The Journal comments section? Anyway give me the cinema over netflix anyday, can’t beat watching a movie on the big screen.
@James Rowan: is this then the obvious, elephant in the room.
Shame they did not build a 70mm IMAX screen as we have to go all the way to the UK for them.
Three years too late. I would have loved a full bottle of vodka and couch whilst enjoying Shang-Chi and the Legend of the Ten Rings.
@Pól Pot: It must be awful waking up and discovering you’re still you. Absolutely nothing of value to give the world.
@Ollie McGlinchey: Last nights half digested kebab?
@Ollie McGlinchey: You’re the epitome of why segregation exists, brother. “But I say unto you, Love your enemies, bless them that curse you, do good to them that hate you, and pray for them which despitefully use you, and persecute you”
@Ollie McGlinchey: Do you ever look yourself in the eye? Physically and metaphorically? God, I bet it really hurts you if you are aware enough to realise that you are stuck being you. Poor sod! I hope the next life will be better for you. I jest, I couldn’t give a fk about you lolololololol
@Mike: “You shall not take vengeance or bear a grudge against any of your people, but you shall love your neighbor as yourself….”
@Pól Pot: I’m always sayin dah meself, pal.
I hate those headlines (the reason why will surprise you)
@KTH: G’wan so and surprise me
@Mick O’K:
Because of one thing (it’s probably not what you think)
Yes indeed
Yippee. Will they serve popcorn and fizzy drinks?
@Garreth Byrne: Hopefully not, as far as popcorn is concerned. I loathe the smell of it and the noise of people crunching on it drives me to distraction. Ditto for crisps and the rustling of the bags. (I have noise sensitivity issues.)
@Sean May: This is why l don’t go to the cinema.
@Garreth Byrne: The Irish cinema has become a gross-out. They’re not cleaned properly. The carpet smells and the seating is in poor repair in many places. Plus the floor is often sticky. Eating and drinking should be banned. Natchos, popcorn, hot dogs and all the other scutter should be banned. If you want your dinner – stay at home. Not to mention the place being left afterwards like a herd of pigs passed through it. For this reason, I let any movie I want to see run its course for four or five weeks to flush out the animals. I go when the place is practically empty and the movie in question is about to be discontinued. I find it’s the only solution. (Floor is still sticky though)
Hate going to the cinema unless it’s at the end of a picture’s run and the place is half empty. Literally, can’t abide the sound of 100 other people chomping,crunching, and slurping . It would seem that nobody can watch anything these days without having to consume their own body weight in odiferous snacks. Happy these days to wait until it’s on Netflix and watch in peace, even if it’s just on my phone .
@IMHO: Exactly. See my comment above.
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