THE likelihood of Ireland falling into recession in 2020 due to the Covid-19 pandemic is fairly high, according to the Economic and Social Research Institute (ESRI).
The not-for-profit research group has warned that the ongoing coronavirus crisis is "the greatest threat that the Irish economy has faced since the financial crisis".
"At this juncture, we assume that these measures stay in place for a 12-week period and the economy recovers afterwards," it said.
"Under this scenario, the Irish economy would shrink by 7.1% in 2020.
Financial crisis in Ireland - recession."Consumption, investment and net trade would all fall sharply; households would cut spending, firms would cancel or postpone investment and external demand for Irish goods and services will fall."
It added that the labour market, "which had been in a position of strength before the spread of the pandemic, is set to face the largest one quarter shock in living memory".
They estimated further that the unemployment rate would rise to 18% in the country, which would mean 350,000 people losing their jobs.
The ESRI stressed that despite the forecasted gloom, the primary policy objective for the country is the implementation of necessary and vital public health measures, including restrictions on social and economic life.
Furthermore, due to the uncertainty of the situation, and the fact that it's very hard to predict when things will be 'back to normal', traditional economic forecasts are almost impossible to carry out.
