| 15.5°C Dublin

Close

Premium


Supporting every single firm will just create a zombie business community

Colm McCarthy


With no early recovery in the offing, the Government can't avoid the inevitable - some firms won't make it out alive

Close

'It is far too early to draw conclusions but the success of public health measures in controlling the pandemic is reflected in economic costs' Stock Image

'It is far too early to draw conclusions but the success of public health measures in controlling the pandemic is reflected in economic costs' Stock Image

'It is far too early to draw conclusions but the success of public health measures in controlling the pandemic is reflected in economic costs' Stock Image

Last Thursday's ESRI report should have ended wishful thinking about an early economic recovery. The authors were brave enough, two months earlier, to produce the first assessment of the damage, at a time when only a handful of fatalities had been reported and just before the lockdown commenced on March 27. They were too optimistic - the table shows their scenario in March and their current 'baseline' projection for 2020.

They now expect the deficit to reach €28bn for 2020, with more to come in later years. These numbers are worse than the downturn that followed the financial crash in late 2008.

The ESRI concedes that things could continue to be difficult moving into 2021, especially if the easing of lockdown results in a resurgence of transmission and a renewal of restrictions. Even if things go well in Ireland and a second surge here is avoided, failures in other countries will limit recovery.