Goodbody Stockbrokers has predicted that the Irish economy is expected to see a “rapid rebound” after the COVID regulations and restrictions are lifted. In the latest report, the firms have predicted that the economy could grow by as much as 5% this year assuming that the vaccine rollout is as scheduled and efficient. The driving factors behind this predicted surge in economic growth can be attributed to two factors: the nearly €13 billion increase in household savings across Ireland during quarantine and the pent-up customer demand for services and goods.
This trend could be seen clearly in the partial reopening in December, with a huge influx in demand across the market. But with the economy reopening and people’s livelihoods returning to normal, there calls to be a careful movement towards returning to normal. It is currently estimated that around 36% of the Irish workforce are currently reliant on some form of government support. That equates to nearly 900,000 individuals that are vulnerable financially if removed from these programs too forcefully. Government implements for incentives to rehire and retaining the job market are essential in recovering smoothly as a country.
Domestic demand within the Irish economy during the pandemic has seen a substantial fall, but that alongside domestic activity is expected to see a growth of 5% during 2021 and as much as 3.5% in 2022. Within the housing industry, nearly 20,000 units were completed and sold in 2020, which is down 8% from 2019. But with the economic rebound in 2021, it is expected that there will be nearly a 20% rise in activity in the housing industry.
Although there are many positive predictions on the direction of the economy as the vaccine starts to roll out publicly and the end of the pandemic is in sight, there are many businesses and families that are concerned with the direction of economic policies. Nearly 35% of firms say they are expected business activity to continue to decline in the next 3 months and nearly 50% of households in Ireland say they will limit spending while waiting on clearer indications of the direction of the economy.
As the economy slowly starts to recover and open up, keep an eye on economic policies and your own spending. There is still much volatility and uncertainty with the opening of international markets and the direction the world economy will take as the vaccine may or may not begin distribution by mid-2021.
Lucas Zhang was a Finance major at Ohio State University. He writes about finance, mortgages, and technology for Irish Mortgage Brokers.