Irish Consumers Still Upbeat on Economy

Irish consumers remain upbeat about prospects for the economy following Britain’s vote to exit the European Union but cautious about how much they will personally gain from surging economic growth, a survey showed

on Tuesday. The KBC Bank Ireland/ESRI Consumer Sentiment Index stood at 102.0 in April, almost unchanged from 101.9 a month earlier. That kept it close to a seven-month high of 103.1 in January and well ahead of a twoyear

low of 96.2 in December, Reuters reported. Views on the outlook for the Irish economy were at their highest level since last August, the authors said.

Ireland’s economy has posted the fastest growth in Europe for the

past three years and unemployment has fallen to 6.2% from a 2012 high of 15.1%.

The threats posed by neighboring Britain’s decision to quit the European Union and the election of US President Donald Trump “appear less immediate” in the wake of the strong economic and jobs data at home, they said.

But household expectations about their personal finances worsened noticeably with only one-in-four reporting an improvement in their current financial circumstances. “The April survey suggests that ‘macro’ concerns eased as the immediate fallout from Brexit and Trump-related concerns has been less than expected,” KBC chief economist Austin Hughes said. “However, with only one in four consumers reporting an improvement in their household finances, the scope for any substantial ‘feel-good’- driven pick-up in consumer spending appears limited.”

Austin Hughes, chief economist at KBC Bank Ireland commented on today’s figures: “The details of the survey suggest a mood of cautious optimism still prevails but there is also a strong sense of an upswing that is being earned or even endured rather than enjoyed.

” In the event of a “hard” Brexit, with the imposition of WTO tariffs on UK trade in 2019, the Irish economy would receive a hit of around 1.5-2%. Fine Gael MEP Brian Hayes said it would be a disaster if Ireland was to incur WTO tariffs on its good post-Brexit. Fine Gael is currently the governing and largest party in Ireland.

Hayes said: The implications are huge for various Irish business sectors, particularly agri-food, dairy and clothing. Under the EU’s external trading arrangements with WTO countries, dairy products are subject to an average bound tariff of 35.5%; animal products are subject to an average bound tariff of 16.9%; clothing products are subject to an average bound tariff of 11.5%. Even if this did happen, it would be unlikely to lead to Ireland going back into recession.