We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
According to the Irish Fiscal Advisory Council, the economy may have shrunk by 21 percent in April after businesses were forced to close following the outbreak of the coronavirus pandemic. Experts claim the crisis has been worsened by Brexit.
Last week, latest figures from the Exchequer found a deficit of €7.4 billion in public finances in July compared to a surplus of €896 million which was recorded in the same month last year.
The deterioration of €8.3 billion was reportedly due to increases in expenditure following the outbreak of the deadly virus.
The huge shortfall will have to be made up by increased borrowing, which has led to experts to warn about a pending recession.
International thinktank, Organisation for Economic Co-operation and Develop (OECD) warned this extra debt will “come back to haunt us”.
Ireland is currently one of the most heavily indebted nations in the world with outstanding borrowings reaching more €110 billion.
Due to the global pandemic, it is believed the world’s economy is likely to shrink by 4.9 percent this year, making it the worst recession since the Great Depression of the 1930s.
Last year, Ireland exported roughly €152 billion of goods but as global demand falls, their exports are set to be badly affected by the pandemic.
While the UK enters its first recession in 11 years, this also has raised concerns for Ireland.
The UK is still one of Ireland’s biggest trading partners. In 2019, UK exports to Ireland were worth £38.3 billion; imports from Ireland were £24.4 billion.
New car sales are often seen as an indication of the health of the economy but they are currently back to recession levels, according to the Irish Society of the Motor Industry.
Brian Cooke, SIMI Director General warned both COVID-19 and Brexit is to blame.
He said: “COVID-19 on the back of Brexit and an already falling new car market since 2016, now sees new car sales back to recession levels, down 30 percent year to date.”
Sinn Féin chief claims Brexit sparking demands for United Ireland [COMMENT]
Micheal Martin’s critical mistake with Sinn Fein laid bare [INSIGHT]
Varadkar humiliated: Expert exposes how Boris FORCED climbdown [REVEAL]
Brexit negotiations are currently ongoing with neither side able to come to an agreement.
The transition period is set to come to an end in December and Prime Minister Boris Johnson has vowed to leave with or without a deal in place.
Today Mr Johnson held his first face-to-face meeting with Irish Taoiseach Micheal Martin since the new premier was elected earlier this summer.
Speaking after the meeting, Mr Martin said: “It seems to me that there is a landing zone if that will is there on both sides, and I think it is.
“My own gut instinct is that there is a shared understanding that we don’t need another shock to the economic system that a sub-optimal trade agreement would give alongside of the enormous shock of COVID.”
On Wednesday, Chancellor Rishi Sunak warned “hard times are here” as the UK economy crumbled into the worst ever recession.
The economy shrunk by a record 20.4 percent in just three months.
Mr Sunak said: “I’ve said before that hard times were ahead, and today’s figures confirm that hard times are here.
“Hundreds of thousands of people have already lost their jobs, and sadly in the coming months many more will.
“But while there are difficult choices to be made ahead, we will get through this, and I can assure people that nobody will be left without hope or opportunity.”
The latest GDP figures released by the Office for National Statistics (ONS) on Wednesday showed that GDP in the UK fell by 20.4 percent between April to June.
Source: Read Full Article