Ireland is heading into the worst recession in the history of the country, leading economists have warned.
As the impact of Covid-19 takes hold, new predictions from the Economic and Social Research Institute claims we are to experience the largest annual decline in our history.
The predictions paint a recession worse than the 2008 financial crash and the global depression between the two world wars.
The team says every aspect of the economy will crumble with consumer spending to drop by 13% and investment by nearly one third.
The research reveals that young workers and those living outside Dublin including Donegal have been worst affected so far and unemployment will remain above 17% for the whole year.
They say the unprecedented increase in public expenditure to combat the virus, coupled with the loss in revenue from the fall in economic activity, will lead to a significant government deficit in 2020.
This deficit is expected to be over €27 billion and action by EU policymakers will be required to ensure national governments including Ireland have the fiscal space to deal with the virus and reboot their economies.
The ESRI says it’s not all bad as they predict that household savings may double during the crisis which could give a boost to the economy post-Covid.
However, it also warns that an extension to the Pandemic Unemployment Payment will give the country a massive deficit.Tags: