Experts expect the Irish economy to downsize by 7.1% as a result of Covid-19.
The Economic and Social Research Institute (ERSI) have stated that "the ongoing COVID-19 pandemic is the greatest threat that the Irish economy has faced since the financial crisis."
The not-for-profit organisation conducted a economic market analysis and predicts that consumption, investment and net trade will potentially plummet. It is estimated that "households would cut spending, firms would cancel or postpone investment and external demand for Irish goods and services will fall."
Supply and demand for the labour market is set to rapidly fall, as the industry is "set to face the largest one quarter shock in living memory."
In the ERSI's scenario analysis, unemployment rates will soar to 18% in quarter 2, compared to 4.8% in quarter 1. This comes as over 350,000 people loose their jobs.
The general government balance which initially was expected to be at a surplus at the start of the year, could now register a 4.3 per cent deficit. This would be due to the lack of incoming revenue and capital into the economy.
This scenario analysis is based on the upcoming three month period. As events are unfolding rapidly, it is exceptionally hard to make solid economic forecast at this time. ERSI notes that this scenario analysis could in fact be rendered benign.