The Great Lockdown: IMF issues downbeat forecast on Irish jobs

Irish unemployment will settle at much higher levels than in Britain and Germany next year as the Covid-19 crisis pushes the world economy into its worst slump since the Great Depression, according to IMF forecasts.

The fund’s Economic Outlook report is the first comprehensive look at the severe economic pain the pandemic will inflict on the world.

Branding the slump ‘The Great Lockdown’, the IMF warned global leaders that they need to collaborate on support for businesses, such as credit guarantees.

In an implicit rebuke to the White House, the IMF tells policymakers to reject “futile” protectionist policies that threaten to make the crisis even worse.

“This crisis is like no other,” said the IMF, urging governments to consider paying frontline medical workers and their families “survivor” grants.

It forecasts the Irish economy will shrink by almost 7% this year and then expand 6.3% in 2021. Irish unemployment will climb to over 12% this year and only fall back to almost 8% in 2021, around double the levels in Britain and Germany.

Annualised figures also mask peak unemployment, with the ESRI and the Central Bank in recent weeks projecting that joblessness here will surge to around 25% this summer.

More evidence of the jobs shakeout came yesterday as figures from the Department of Social Affairs showed a total of 533,000 people were receiving the €350-a-week Covid-19 payment, and a further 210,000 were on the live register claimant count.

Combined, claimants now account for around 40% of all private-sector employment.

However, a further 219,000 people are on the wage-subsidy scheme, Revenue said.