Ireland: Consumer confidence deteriorates at the start of Q2
May 2, 2019
Consumers turned more pessimistic at the start of the second quarter as choppier waters in the global economy and ongoing Brexit-related uncertainty pose headwinds to the Irish economic outlook and the future of households’ personal financial situation in this cloudy context. The KBC Bank Ireland/ESRI consumer sentiment index fell considerably in April after recovering some lost ground in the previous month, dropping to 87.7 from 93.1 in March. Thus, the index moved further below the critical 100-point threshold that separates optimism from pessimism.
April saw an across-the-board decline in the index, with consumers especially more downbeat about their personal financial situation in the year ahead, the current economic conditions, and their willingness to make major purchases. Consumers were also more pessimistic about employment prospects, held less favorable assessments on their personal finances in the past 12 months, and expressed a bleaker outlook on the Irish economy. The sharp rise in fuel costs since the start of the year, coupled with a dimmer view on economic conditions amid an uncertain global backdrop, have sprouted increased concerns among consumers on trends in household purchasing power and prompted them to scale back significantly on spending.
Author: Nihad Ahmed, Economist