Advertisement

Economy 'now in midst of severe recession', Donohoe says

New government projections say Irish GDP will fall by more than 10% this year, with unemployment ...
Stephen McNeice
Stephen McNeice

15.12 21 Apr 2020


Share this article


Economy 'now in midst of sever...

Economy 'now in midst of severe recession', Donohoe says

Stephen McNeice
Stephen McNeice

15.12 21 Apr 2020


Share this article


New government projections say Irish GDP will fall by more than 10% this year, with unemployment to peak at 22%.

Finance Minister Paschal Donohoe has warned 220,000 jobs will be lost this year - saying it's clear the economy is "now in the midst of a severe recession".

Government Chief Economist John McCarthy has said the coronavirus crisis will lead to the "deepest recession since the 1930s" internationally.

Advertisement

It's projected that there will be a recovery in 2021 with a 5.5% increase in employment, while the numbers out of work to fall below 10% next year.

However, the economy will not return to where it was at the start of this year until 2022.

The predictions are based on restrictions lasting for three months, and GDP could fall by as much as 15% if they last until the end of the year.

Minister Donohoe said: "Given the extraordinary economic situation that now confronts us, we have kept the assessment to the current year and next year.

"We now expect growth domestic product to contract by around 10.5% this year.

"We are now clearly in the midst of a severe recession, both domestically and globally."

He said the figures released today are a scenario "rather than a forecast, per se", and are based on an assumption that the current coronavirus restrictions will be gradually eased in the coming months.

He said: "If containment measures are not lifted... then the economic effect will clearly be more severe."

Minister Donohoe insisted the economy will recover, but warned that some sectors will recover slower than others.

He also pointed to the economy has gone from "effectively full-employment in the early part of the year to exceptionally high levels of unemployment".

Figures released yesterday showed that more than one million people are receiving some sort of State income support amid the current crisis.

Main image: File photo of Finance Minister Paschal Donohoe. Picture by Leon Farrell/PA Wire/PA Images

Share this article


Read more about

Coronavirus Economy Paschal Donohoe

Most Popular