Finance Minister contemplates long-term 'scarring effects' for economy from Covid

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Employment will not be 'comparable' with pre-pandemic levels until 2023

Finance Paschal Donohoe Image: Sasko Lazarov/RollingNews.ie Finance Paschal Donohoe Image: Sasko Lazarov/RollingNews.ie THE DEPARTMENT OF Finance has warned that it is too soon to predict the long-term impact of Covid-19 on the economy.

The predictions for the growth of the domestic economy is largely based on estimates of pent-up demand, with the department estimating that there is between €11-12 billion in “excess savings” within the economy. The projections for the economic outlook assume that there will be a gradual relaxation of Covid-19 restrictions over the second quarter followed by even further relaxation in third and fourth quarters.

Early last year, before the effect of the pandemic hit, the seasonally adjusted unemployment was 5.4% in March 2020 and 4.8% in February 2020. “Some businesses would fail under the strain of a continuing lockdown, leading to more jobs being permanently lost,” the report says.

 

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