Ireland’s GDP will fall 10.5% this year
However, the Ministry of Finance sees a much faster recovery with GDP growth of 6% in 2021
The impact of the Covid-19 pandemic and the containment measures implemented will cause a historical contraction in the Irish economy, which will close 2020 with a 10.5% drop, while the unemployment rate will skyrocket in the second quarter up to 22%, according to the projections contained in the new Stability Program, presented by the Irish Minister of Finance, Pachal Donohoe.
If the Dublin forecasts are met, the fall of 10.5% of Irish GDP as a result of the Great Seclusion would outweigh the impact of the Great Recession, with a contraction of GDP of 4.5% in 2008 and 5.1% in 2009, which would lead to the rescue of Ireland at the end of 2010. In 2019, Irish GDP grew by 5.5%.
However, the Irish Ministry of Finance is seeing a much faster recovery in activity, with GDP growth of 6% in 2021, as long as the economy begins to register a gradual recovery throughout the second half of this year. Likewise, the Irish Government anticipates a strong rebound in the deficit, which will reach 7.4% of GDP in 2020, while public debt will rise to 69%.
“My department projects that GDP will fall 10.5% this year, as a consequence of the sharp contraction in internal and external demand as a result of the measures taken to combat Covid-19 here and internationally. However, it is expected that the gradual recovery assumed in the second half of the year will gain momentum next year, with the economy growing at 6% and unemployment falling below 10% next year,” said Donohoe.
He added that “although the economic deterioration has not been unprecedented in terms of speed and scale, so has the Government’s response. This has been possible thanks to prudent policies implemented in recent years,” stressed the Irish minister.
Source: dpa
