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10

2020 Industry Group Warns Irish Economy To Shrink 2.5% This Year
And Only Grow By 1.4% In 2021
30th, That 100,000 Jobs In domestic economy falling by 6.5% and the unemployment
The Irish economy will shrink by 2.5% this year, with the
September rate averaging just below 16%, according to forecasts by the

Department of Finance.
In its economic projections published to assist in planning

| The Tourism Sector At for Budget 2021, the Minister for Finance, Paschal Donohoe
released forecasts that projected GDP will fall by 2.5% in 2020
EXAMINER ‘Imminent Risk’ and to grow by only 1.4% in 2021. Employment is set to fall
by 13.8% this year this with an annual average unemploy-
ment rate of just under 16 per cent this year, and 10.7 per cent
in 2021. The forecasts are based on a disorderly Brexit and on
IRISH no widespread Covid-19 vaccine being available.
It states the impact of Covid-19 on GDP is less than previ-
ously expected, mainly due to the resilience of Multi-National
Company (MNC)-dominated exports. However, the hit on
the domestic economy has been severe, with a drop of 6.5%.
According to Mr Donohoe: “The macroeconomic projec-
tions are based on two key assumptions: firstly, from the
beginning of next year, bilateral trade between the UK and
the EU will be on World Trade Organization terms and sec-
ondly, a widespread vaccination for Covid-19 vaccine will not
be available.
“Under this scenario, my Department is projecting that
GDP will fall by 2.5 per cent this year. While this headline fig-
ure is less severe than envisaged in the spring, it reflects the
contribution to GDP from parts of the multinational sector.
Other – more relevant – indicators confirm a severe econom-
ic fall-out from the pandemic.”
He said the assumption of a disorderly end to the Brexit
transition period meant there will likely be significant disrup-
tion to trade next year. “GDP is projected to grow by 1.4 per
cent, around three percentage points lower than it would oth-
erwise be if a Free Trade Agreement was put in place,” he
he Government has people departing the country. Fenn said that existing sup- stated.
been called on to Some 328,200 people departed ports were totally inadequate “While the economic decline is expected to be less severe
Turgently intervene to in August, compared to more for the tourism industry given in 2020 than previously envisaged there is no doubt that we
safeguard 100,000 Irish than 2.19 million departures the current restrictions. have experienced a significant shock since March and the
tourism sector jobs at in August last year. Prior to Covid-19, he said onset of Covid-19. On the plus side, however, it is important
“imminent risk” due to CSO statistician Gregg tourism supported 270,000 to note that employment is expected to grow by around 7%
Covid-19. Patrick said overseas travel livelihoods, one in 10 of all or 145,000 jobs next year, having a very real impact on the
The Irish Hotels continued to recover in Irish jobs but that an estimat- economy and society more generally.
Federation said the sector was August, compared to July, but ed 100,000 jobs of these have “The pandemic, however, will result, in all likelihood, in
facing an exceptionally grim it was only a fraction of the been lost so far this year and a some level of permanent damage to the economy – so-called
outlook and needed addition- overseas travel in August of further 100,000 are at immedi- ‘scarring effects’. However, policy can help to minimize
these. The forthcoming Budget will continue to provide
al government supports in the last year. ate risk without substantial counter-cyclical support to the economy and provide details
upcoming Budget. “This illustrates the contin- sector specific supports being on the Recovery Fund which is provided for in the Program
It comes after new figures uing and dramatic impact of put in place. for Government.” C
from the Central Statistics the Covid-19 pandemic on “A severely devastated
Office showed the number of international travel to and Irish tourism sector would be
overseas visitors to Ireland from Ireland,” he said. a major loss to Ireland’s econ- Latest Unemployment Statistics
plummeted by more than 80 The Irish Hotels omy and society for many Show Under-25s Hardest Hit
per cent year on year. Federation said while the years to come. This can and The unemployment rate – including those on Pandemic
Some 363,600 people “true impact” on tourism was must be avoided,” he said. Unemployment Payment (PUP) – stood at 14.7 per cent in
arrived in Ireland from over- even more stark than the fig- “Our industry is facing a September, according to figures from the Central Statistics
Office. That is down from 15.3 per cent in August.
seas in August, this represent- ures suggested as the number very difficult number of Breaking the figures down by age and gender, 36.5 per cent
ed a 60 per cent increase com- of people who arrived in the months ahead with many of those aged between 15 and 24 are receiving unemploy-
pared to the 227,300 people country included essential and tourism businesses in severe ment or PUP supports, compared to 12 per cent of those aged
who travelled into the coun- non-tourism travel. difficulty. between 25 and 74 years.
try in the previous month. The group said Ireland’s “Urgent sector specific Seasonally adjusted figures, also removing those on PUP,
But the statistics showed tourism sector had been measures are now required show an unemployment rate of 5.4 per cent for September,
that overseas travel remained “completely wiped out” since from the Government to sup- up from 5.2 per cent the previous month and from 4.8 per
“dramatically lower” than the March and that the situation port tourism businesses and cent this time last year. The seasonally adjusted unemploy-
same period last year when had been compounded by a safeguard thousands of jobs. ment for those aged between 15-24 years is 18.9 per cent,
more than 2.25 million people dramatic drop in domestic “This must include compared to 3.8 per cent for those aged between 25 and 74
arrived in the country. Year hotel booking as the sector enhanced employment subsi- years.
on year it was a drop of 84 per entered a “quasi-lockdown” dies, a reduction in tourism The CSO notes in its statement that those benefitting from
cent. because of county restrictions VAT, extended waiver of local the Temporary Wage Subsidy Scheme (TWSS), having an
There was also a similar in Dublin and Donegal. authority rates and greater attachment to their employer, continue to be classified as
decrease in the number of IHF chief executive Tim access to banking finance.” C employed for the purposes of the statistics. C