(Alliance News) - The novel coronavirus pandemic and related restrictions could shrink the Irish economy by up to 14% in 2020, according to the country's central bank.
In a report published on Friday, the Central Bank of Ireland said that a "widespread shutdown of businesses caused by the pandemic" led to "sudden and large-scale job losses" and a "severe negative shock to both consumer spending and investment."
The worst-case scenario of a 14% recession is based on the virus lingering through the year and prompting some restrictions to be reimposed.
The bank's best-case outcome would see Ireland's gross domestic product cut by 9%, slightly better than the 10.5% projected earlier by the Finance Ministry.
Ireland's latest relaxation of curbs imposed in March to stem the pandemic saw businesses such as restaurants and hairdressers resume work on Monday.
Many retailers and offices reopened a month ago as daily case numbers fell to low double figures. According to IHS Markit and Allied Irish Banks, whose purchasing managers' index for Ireland's services sectors was published on Friday, the "most severe phase of the hit to business had passed in June."
If the pandemic fades, Ireland's economy is expected to slowly recover in 2021. But should Britain and the EU fail to agree terms on a free trade deal by the January, then growth "will be weaker" next year, the central bank warned.
Britain is Ireland's second biggest trade partner after the US, with Irish agriculture exports highly vulnerable to what the bank terms "a disruptive Brexit."
source: dpa
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