The Irish economy is heading into recession a senior economist has warned, as official measures designed to defeat the Covid-19 outbreak hits the jobs-rich industries of tourism, hospitality, and retail.
Economist Jim Power said that the economic hit in the coming months may not meet the technical definition of a recession but that the fallout facing exposed industries will nonetheless be severe.
Many employers will be forced to let staff go on a voluntary and involuntary basis to keep staff safe, Mr Power said, and that will lead “close enough to a recession as most people would understand it”.
Dermot O’Leary, chief economist at Goodbody, said that the tourism industries across Europe will be hit hard.
“Along with Spain, Portugal, and France, Ireland will experience an outsized economic impact as a result of the collapse in travel due to the virus,” he said.
“President Trump’s decision to place an all-out travel ban from Europe marks an extraordinary escalation in the containment efforts to fight the spread of the coronavirus,” Mr O’Leary said, saying that tourism accounts for 10% of all Irish jobs.
Business groups most vulnerable to the fallout from the virus scrambled to reassure customers but a leading tourism chief said it was time for the Government to provide “a rescue package” for the industry’s 260,000 jobs.
Eoghan O’Mara Walsh, head of the Irish Tourism Industry Confederation, which brings together both private firms and the Government tourism agencies, in the north and south, said there are thousands of tourism jobs at risk.
The closure of tourism attractions and the restriction of gatherings will hit tourism and hospitality industries “very hard”, he said.
“We are making a call for Government for a rescue package specifically for the tourism industry,” Mr O’Mara Walsh said.
Retailers said they were hit by exceptional demand from customers.
Noel Keeley, chief executive at Musgrave, which owns the SuperValu and Centra chains, said there was no need for panic buying.
Elsewhere, global stock markets tanked in response to the ban on most Europeans travelling to the US announced by President Trump and following an unconvincing ECB meeting led by president Christine Lagarde.
The Ftse-100 in London and the Euro Stoxx indices fell by 10.8% and 11.5% and the price of Brent crude oil slumped again. Long-haul airlines were among the worst hit.
Chris Beauchamp, chief market analyst at online broker IG, said that ECB’s “fumbled press conference” led to fears about the sovereign debt of peripheral eurozone countries.
By leaving its key reference rate unchanged, the ECB meeting “underwhelmed” markets, said Cian Pierce, a UK money market trader at Bank of Ireland.
“In her press conference, ECB President Christine Lagarde continues to call for an ambitious, co-ordinated fiscal response from European governments, with markets now eagerly awaiting concrete news German plans to ditch the balanced budget policy in order to combat the coronavirus,” he said.