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Irish 2020 GDP May Fall by 14 Percent in Virus Second Wave: Central Bank

DUBLIN—Tentative signs of recovery in Irelands economy means it is likely to shrink by 9 percent this year if further stringent measures to contain the coronavirus are avoided, but almost 14 percent if they are reimposed, the countrys central bank said on Friday.

Ireland, which has had the fastest growing economy in Europe in recent years, mostly completed a careful exit from lockdown this week. But much of its services industry is operating at limited capacity, and travel from abroad is severely restricted.

The central banks baseline outcome was similar to the 8.3 percent drop in gross domestic product (GDP) it forecast in April, and would see unemployment fall to 12.5 percent by the end of the year from 22.5 percent last month, and an average of 7 percent in 2022 when output would recover to its pre-crisis level.

However, in the severe scenario of a resurgence of the virus at some point over the next year, unemployment would average almost 17 percent in 2020, and GDP would still be about 5 percent below its pre-crisis level in 2022.

“While the magnitude of output losses would be lower in a second phase of containment than during the first, such losses would likely be more persistent and thus more damaging to the long run potential growth rate of the economy,” the central bank said in its quarterly economic bulletin.

Both scenarios assume neighbouring Britain agrees a free trade agreement with the European Union with no tariffs and quotas on goods applying from January 2021.

Such an outcome would knock just under 1 percentaRead More – Source

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