Consumers a little gloomier about outlook last month
Published 11/08/2011 | 05:00
CONSUMER confidence fell again in July due to the global financial crisis and the move by the European Central Bank to hike rates a second time in June.
The consumer sentiment index weakened to 55.9 from 56.3 in June, according to KBC Bank and the ESRI.
Steep price discounts by retailers were not enough to lift the mood of consumers beset by worries about their financial futures.
The index fell to 55.9 from 56.3 in June, which was the weakest reading since the Government came to power in February.
The index has slipped from a two-and-a-half-year high of 67.9 reached in June last year.
Consumers are worried that the global stock market turmoil and the eurozone debt crisis may mean even more pain in December's Budget than already signalled.
Tax hikes of €1.5bn and spending cuts of €2.1bn are planned in the Budget.
Chief economist at KBC Bank Austin Hughes said: "An incessant focus on the crisis has made the average Irish consumer painfully familiar with a large number of previously exotic financial terms.
"Even if the technical complexities around Greek debt sustainability or the US debt ceiling remain almost incomprehensible, there is a clear understanding of the damaging consequences of the crisis for the future living standards of the average Irish family."
Mr Hughes said that as well as potentially impacting on exports, the rumbling European debt crisis risked making Irish consumers keep their wallets in their pockets.
However, there was some good news. Mr Hughes noted that consumers remained gloomy, but they were not as downbeat as when the fiscal and banking crises began and sentiment hit an all-time low of 39.6 in July 2008.