The economy could contract by over 7% this year and unemployment could soar to around 18% as a result of measures taken to slow the spread of the coronavirus, the Economic and Social Research Institute warned today.
The ESRI said the Covid-19 pandemic is the greatest threat that the Irish economy has faced since the financial crisis.
In its quarterly Spring Economic Commentary, the ESRI said that if Government measures to combat the spread of the virus remain in place for a 12-week period, the economy would shrink by 7.1% this year.
The labour market, which had been in a position of strength before the spread of the pandemic, is also set to face the largest quarterly shock in living memory, according to the ESRI.
It predicts that the unemployment rate will increase to 18% in the second quarter of the year from 4.8% in the previous quarter, as more than 350,000 people lose their jobs.