FILE PHOTO: A man walks his dog near a closed bar, as the spread of the coronavirus disease (COVID-19) continues, Dublin, Ireland, March 29, 2020. REUTERS/Jason Cairnduff/File Photo
DUBLIN (Reuters) – Irish consumer sentiment suffered its largest monthly drop on record in April, a survey showed on Thursday, demonstrating the scale and speed of the economic collapse unleashed by the coronavirus pandemic.
Ireland has shut bars, restaurants and non-essential retail outlets in stay-at-home restrictions put in place on March 29 that are due to run until at least May 5 and have already more than trebled the unemployment rate to 16.5%.
The KBC Bank consumer sentiment index nosedived to 42.6 from 77.3 in the previous sampling undertaken from March 3 to 10, before the gradual shutdown of the country began. It was the sharpest month-on-month decline in the survey’s 24-year history.
It was also the second survey this month to show a record monthly fall after a collapse in activity reported by the services sector.
The sentiment reading was slightly above the series’ lowest mark of 39.6 recorded in July 2008 when Ireland was among the countries hardest hit by the global financial crisis that pushed it into a three-year international bailout two years later.
The scale of the drop this time around suggested the capacity of Irish consumer spending to move back to a positive path “may depend critically on the scale, scope and speed of policy actions to re-start economic activity”, Austin Hughes, chief economist at KBC Ireland, said.
“Expectations are still slightly above the low point of the previous crisis, presumably reflecting a judgement that the current crisis is finite in nature,” Hughes said.
“The details of the sentiment survey underline the scale of difficulties now being felt. Only one in 20 see their financial circumstances on an improving trend at present compared to one in five at the start of the year.”
Reporting by Padraic Halpin; Editing by Peter Cooney