What will the economy look like in 6 months time?

rajqo

Honestly all depends how long will this lockdown take. There might be some decline in travel as people would be cautious, but this isolation is currentlydriving people crazy and people want to go out and meet up again - and it's not at home.
Airlines and hotels will lower prices to get customers fly and stay. People will save more in a way they will travel local and intra europe rather than overseas.
It was a long winter and summer is still gonna happen despite coronavirus. Long days will not leave people stay at home especially with now being forced to stay home so long.
Yes - people are laid off work but mainly because of government restrictions and their forced closure of borders, restaurants, shops, shopping centres, coffee shops, cinemas etc... It's not like those places bankrupt or lost customers, but the government forced closed them temporarily through restrictive orders so people can't spend money there.
This is not only Ireland's problem, it's worldwide. For example China's economy is based mainly on export, but if the world is on a lockdown, they suffer too because nobody can shop their cheap labour products.
Lifting up restrictions would bring positive attitude to everyone's life and yes - people will still go to starbucks or costa or dundrum shopping or mcdonald's.
Don't look at it money way - it's just something what people made and can make again. Life is more important and when we have no life, we have no money either.
It can be depressing to see so much negativity in today's events, but humanity will get through this and we will learn from this something new.

Bayman81

rte. ie/news/business/2020/0401/1127866-governments-covid-19-costs-could-hit-30-billion-kbc/

30bn new debt would be 150-300mm annual interest payments. Bad, but hardly requiring life changing new policies.

saabsaab

Any argument for the government vouchers instead of money to support local business?

Stacksofwacks

I think the economy will bounce back quickly enough. Say this goes on til late May/June and then we're over the worst of it then the economy will be fine, it may take 6-12 months to get back to normal fully. Just keep doing what we're doing and the sooner it will be over

Harry Palmr

If a vaccine looks unlikely in this calender year there will have to be a kind of relax/restrict rhythm to the economy albeit with certain restrictions staying more or less as is for the elderly/vulnerable. The notion of an unrelenting shut down of society and a large chunk of the economy is simply unfeasible

Snow Garden

Stacksofwacks wrote: »

I think the economy will bounce back quickly enough. Say this goes on til late May/June and then we're over the worst of it then the economy will be fine, it may take 6-12 months to get back to normal fully. Just keep doing what we're doing and the sooner it will be over

Tourism makes up roughly 10% of our GDP. Where do you think the tourists will come from in H2 2020 and 2021 when the global economy is contracting and confidence is at an all time low? Confidence is a major input to economic recovery and growth, it will be completely eroded for all of 2020. Another example, do you think there will be many new cars sold in July 2020 or January 2021 compared to previous years?

This virus will impact every single industry as far as I can see. Food retailers might come out of it in some decent shape but again the lack of tourists and consumer confidence will have an impact there too e.g. (cafes, restuarants etc).

There is so much to consider but the attitude of the borrowing markets and government overspend will have a major impact.

We borrowed heavily from 2008 to 2016 to keep the show on the road. It increased our national debt exponentially. We did not reform the economy during those tough years (e.g. welfare spend, public service efficiency) which is a pity. Now we have little wriggle room. Tough decisions ahead.

We may have budget deficits similar to 2010 (18 billion) coming up. Who will be willing to bail us out given our existing debt problem?

Harry Palmr

Irish people will not be travelling either so some return to bucket and spade holidaying will help offset the lack of foreign visitors.

nthclare

Harry Palmr wrote: »

Irish people will not be travelling either so some return to bucket and spade holidaying will help offset the lack of foreign visitors.

Exactly what I think, and trips to the Likes of Blarney Castle, Bunratty Castle, Birr Castle, Westport House, Muckross House...

Ballybunnion will again be ingrained in kids memories, and Lahinch and Tramore as well as the Sligo beaches...

Trabolgan will be the new Costa, the Aqua Dome in Tralee will be chock a block.... mark my word in the next few years our domestic tourism will be coining it in... Hopefully

snotboogie

Snow Garden wrote: »

Tourism makes up roughly 10% of our GDP. Where do you think the tourists will come from in H2 2020 and 2021 when the global economy is contracting and confidence is at an all time low? Confidence is a major input to economic recovery and growth, it will be completely eroded for all of 2020. Another example, do you think there will be many new cars sold in July 2020 or January 2021 compared to previous years?

This virus will impact every single industry as far as I can see. Food retailers might come out of it in some decent shape but again the lack of tourists and consumer confidence will have an impact there too e.g. (cafes, restuarants etc).

There is so much to consider but the attitude of the borrowing markets and government overspend will have a major impact.

We borrowed heavily from 2008 to 2016 to keep the show on the road. It increased our national debt exponentially. We did not reform the economy during those tough years (e.g. welfare spend, public service efficiency) which is a pity. Now we have little wriggle room. Tough decisions ahead.

The big point on the 2008 debt was that our bonds were junk and came with ridiculous interest rates. That hopefully will not be the case this time. We have a huge infrastructure backlog, certainly the biggest in Western Europe, to work though to help the economy. Metrolink, M20, Galway Ring Road and busconnects have all actually started their pre construction phases. We could see the likes of Dart Underground, Busconnects Limerick, the four new Luas lines, the North Ring Road and Cluas actually get started. The counter cyclical measures muted by Leo this week are extremely encouraging.

nthclare wrote: »

Exactly what I think, and trips to the Likes of Blarney Castle, Bunratty Castle, Birr Castle, Westport House, Muckross House...

Ballybunnion will again be ingrained in kids memories, and Lahinch and Tramore as well as the Sligo beaches...

Trabolgan will be the new Costa, the Aqua Dome in Tralee will be chock a block.... mark my word in the next few years our domestic tourism will be coining it in... Hopefully

11.5 million overseas visitslspending 6 billion last year. No way we can come close to replicating this with domestic demand.

Snow Garden

Harry Palmr wrote: »

Irish people will not be travelling either so some return to bucket and spade holidaying will help offset the lack of foreign visitors.

Yes but 11.2 million tourists visited Ireland in 2019 and Irish people will have a lot less money in their pockets given unemployment and increased taxes.

saabsaab

Snow Garden wrote: »

Tourism makes up roughly 10% of our GDP. Where do you think the tourists will come from in H2 2020 and 2021 when the global economy is contracting and confidence is at an all time low? Confidence is a major input to economic recovery and growth, it will be completely eroded for all of 2020. Another example, do you think there will be many new cars sold in July 2020 or January 2021 compared to previous years?

This virus will impact every single industry as far as I can see. Food retailers might come out of it in some decent shape but again the lack of tourists and consumer confidence will have an impact there too e.g. (cafes, restuarants etc).

There is so much to consider but the attitude of the borrowing markets and government overspend will have a major impact.

We borrowed heavily from 2008 to 2016 to keep the show on the road. It increased our national debt exponentially. We did not reform the economy during those tough years (e.g. welfare spend, public service efficiency) which is a pity. Now we have little wriggle room. Tough decisions ahead.

We may have budget deficits similar to 2010 (18 billion) coming up. Who will be willing to bail us out given our existing debt problem?

While I agree with much of what you say the ECB will release a Covid fund as this affects all of Europe to ease borrowing in my opinion. We also have a strong pharma and tech sector so that should see a boom.

Balf

Snow Garden wrote: »

Tourism makes up roughly 10% of our GDP. Where do you think the tourists will come from in H2 2020 and 2021 when the global economy is contracting and confidence is at an all time low? Confidence is a major input to economic recovery and growth, it will be completely eroded for all of 2020. Another example, do you think there will be many new cars sold in July 2020 or January 2021 compared to previous years?

......

We may have budget deficits similar to 2010 (18 billion) coming up. Who will be willing to bail us out given our existing debt problem?

I agree with your main point. The quarantine is creating an economic problem that will take many years to put right. The human cost being incurred is huge.

But I just wanted to question that 10% of GDP figure; my picture was that tourism is very important to some regions, but not of the order of 10% nationally. That's just a point of detail, though. Would you have a source?

Snow Garden

Balf wrote: »

I agree with your main point. The quarantine is creating an economic problem that will take many years to put right. The human cost being incurred is huge.

But I just wanted to question that 10% of GDP figure; my picture was that tourism is very important to some regions, but not of the order of 10% nationally. That's just a point of detail, though. Would you have a source?

Fair point. It was 8% in 2012 but is down to 6.2% in 2018.

https://knoema.com/atlas/Ireland/topics/Tourism/Travel-and-Tourism-Total-Contribution-to-GDP/Contribution-of-travel-and-tourism-to-GDP-percent-of-GDP

Snow Garden

saabsaab wrote: »

While I agree with much of what you say the ECB will release a Covid fund as this affects all of Europe to ease borrowing in my opinion. We also have a strong pharma and tech sector so that should see a boom.

Pharma and Tech will be impacted by the global economic contraction and customer confidence. What large corporates are going to prioritise IT spend in the current climate? If anything, they will be looking to reduce it.

I know of one Pharma in Galway that cancelled/stalled an imminent 60m expansion in the last week or so because of fears around future demand for it's products.

We haven't simply hit the pause button on a booming economy. We have damaged the fundamentals of the economy. It will take years to recover.
That said I think we would certainly have gone into recession by Q4 2020 as part of the cycle but Covid19 fast-tracked that and made it a lot worse.

saabsaab

Snow Garden wrote: »

Pharma and Tech will be impacted by the global economic contraction and customer confidence. What large corporates are going to prioritise IT spend in the current climate? If anything, they will be looking to reduce it.

I know of one Pharma in Galway that cancelled/stalled an imminent 60m expansion in the last week or so because of fears around future demand for it's products.

We haven't simply hit the pause button on a booming economy. We have damaged the fundamentals of the economy. It will take years to recover.
That said I think we would certainly have gone into recession by Q4 2020 as part of the cycle but Covid19 fast-tracked that and made it a lot worse.

I was thinking that anything related to treatment of the ill will see a boom as the crisis takes hold including related Pharma also there will be a push that may not reverse to home working and tech will be needed for that also. I agree there will be a recession in general.

Snow Garden

saabsaab wrote: »

I was thinking that anything related to treatment of the ill will see a boom as the crisis takes hold including related Pharma also there will be a push that may not reverse to home working and tech will be needed for that also. I agree there will be a recession in general.

Pharma may do well during the virus crisis but the demand for their products will shrink afterwards. Governments and other customers will simply be too broke. CEOs are going to tighten the purse strings until they figure out where they stand financially. That's what happens in a recession.

The Irish government is facing a budget deficit of at least 20 billion at the end of 2020. Like every other government, they will have to significantly cut spending.

Wanderer78

Snow Garden wrote: »

Pharma may do well during the virus crisis but the demand for their products will shrink afterwards. Governments and other customers will simply be too broke. CEOs are going to tighten the purse strings until they figure out where they stand financially. That's what happens in a recession.

The Irish government is facing a budget deficit of at least 20 billion at the end of 2020. Like every other government, they will have to significantly cut spending.

if governments go into wide scale austerity, it will cause absolute chaos, as it simply doesnt work

smelly sock

Wanderer78 wrote: »

if governments go into wide scale austerity, it will cause absolute chaos, as it simply doesnt work

It worked during the last downturn.

Wanderer78

smelly sock wrote: »

It worked during the last downturn.

it didnt, it crushed our most critical of public services, id argue, some of the issues we re now dealing with this virus, in relation to our health systems, can be linked to previous austerity. theres plenty of research out there to show, austerity is a dangerous ideology, it has no real world evidence of actually working

AdamD

Snow Garden wrote: »

Pharma and Tech will be impacted by the global economic contraction and customer confidence. What large corporates are going to prioritise IT spend in the current climate? If anything, they will be looking to reduce it.

I know of one Pharma in Galway that cancelled/stalled an imminent 60m expansion in the last week or so because of fears around future demand for it's products.

We haven't simply hit the pause button on a booming economy. We have damaged the fundamentals of the economy. It will take years to recover.
That said I think we would certainly have gone into recession by Q4 2020 as part of the cycle but Covid19 fast-tracked that and made it a lot worse.

Plenty when they see IT infastructure make or break this period of working from home, that may well need to happen for the foreseeable

keynes

The world and economy will never be the same again. The virus can't be contained and will simply mutate into other forms in any case; we'll basically end up living in a world where you die from a cold. The idea that the economy can revert to normal in this setting is outlandish. Travel, tourism, restaurants etc will never recover but on the brighter side (for want of a better phrase), there'll be a lot more jobs in medical (e.g., checking people as they board flights etc)

ZX7R

Wanderer78 wrote: »

if governments go into wide scale austerity, it will cause absolute chaos, as it simply doesnt work

The opposite of austerity will happen this time ,as another poster pointed out borrowing will have little or no interest applied, also surprisingly it wasn't mentioned here that I could see the German minister for finance has done a bit of a u turn in regards to a Unilateral bail out fund coming from the EU he even said euro Bond's are not ruled out.
Interestingly he also said no member of the union will need the troika to bail them out

Pete_Cavan

keynes wrote: »

The world and economy will never be the same again. The virus can't be contained and will simply mutate into other forms in any case; we'll basically end up living in a world where you die from a cold. The idea that the economy can revert to normal in this setting is outlandish. Travel, tourism, restaurants etc will never recover but on the brighter side (for want of a better phrase), there'll be a lot more jobs in medical (e.g., checking people as they board flights etc)

I think this is a bit ott. The virus is here to stay but the experience with other viruses is that when they mutate, it is into a less deadly form. Covid-19 also doesn't mutate as much as influenza so a vaccine is likely to be easier to find. Influenza will probably return to being a bigger killer and one which most people don't think too much about.

I don't see screening people as they board flights being realistic. You would need a test that gives an instant result. Also, by the time that a person gets to the boarding gate, they will have been around huge numbers of people in the terminal, on the way to it, etc. Everyone is likely to be carrying it so you may as well turn everyone away and cancel international travel altogether. The immunity passport thing will remove the need for that testing anyway.

Snow Garden

AdamD wrote: »

Plenty when they see IT infastructure make or break this period of working from home, that may well need to happen for the foreseeable

Work from home software is available for many many years. Are you talking about software or broadband rollout?

saabsaab

Pete_Cavan wrote: »

I think this is a bit ott. The virus is here to stay but the experience with other viruses is that when they mutate, it is into a less deadly form. Covid-19 also doesn't mutate as much as influenza so a vaccine is likely to be easier to find. Influenza will probably return to being a bigger killer and one which most people don't think too much about.

I don't see screening people as they board flights being realistic. You would need a test that gives an instant result. Also, by the time that a person gets to the boarding gate, they will have been around huge numbers of people in the terminal, on the way to it, etc. Everyone is likely to be carrying it so you may as well turn everyone away and cancel international travel altogether. The immunity passport thing will remove the need for that testing anyway.

I saw a report of using sniffer dogs to identify cases of Covid. 19. They seem to think it will work.

saabsaab

smelly sock wrote: »

It worked during the last downturn.

Maybe to a point but we were on our own with it, this time it will be the globe. Anyway the ECB will step in this time.

Balf

keynes wrote: »

The world and economy will never be the same again. The virus can't be contained and will simply mutate into other forms in any case; we'll basically end up living in a world where you die from a cold. The idea that the economy can revert to normal in this setting is outlandish. Travel, tourism, restaurants etc will never recover but on the brighter side (for want of a better phrase), there'll be a lot more jobs in medical (e.g., checking people as they board flights etc)

I don't see it quite as bleak as that, but I expect recovery will take years.

I'm not sure there will be a medical boom. Many countries have already reached the limit of what they can spend on healthcare, driven by older populations. And now there will be even less money, so healthcare will have to constrain itself, too.

Pa ElGrande

Rushing out untested digital finance fixes for Covid-19 is folly
Izabella Kaminska, Financial Times.

As a result, a lot of outside-the-box thinking that might have been seen as hare-brained or extreme has gained legitimacy. This includes the idea that some form of digital stimulus or central bank digital currency (CBDC) could help central banks push further beyond the boundaries of conventional policy.

Blue sky thinking should always be encouraged. Yet it is important not to rush out radical monetary transformations that have not been properly tested or scrutinised for unintended consequences. This has not stopped many influential names from pitching digital solutions as part of the crisis response.

source

Winds of Change: The Case for New Digital Currency
By Christine Lagarde, IMF Managing Director, November 14, 2018

n this context, I would like to do three things this morning:

• First, frame the issue in terms of the changing nature of money and the fintech revolution.
• Second, evaluate the role for central banks in this new financial landscape—especially in providing digital currency.
• Third, look at some downsides, and consider how they can be minimized.

source

There were several madcap schemes running around before this economic crisis and now there is a rush to change the monetary system without any consideration. They are using the virus to propose drastic changes to the economy without any testing or analysis plus Christine Lagarde is now head of the ECB.

snoopboggybog

For IT I think many companies will start pricing up the cost of having someone on site with physical hardware or start moving everything to the cloud with a centralized team, virtualized desktops etc where is can be easily managed.

Cloud computing is going to kick off big time when this is over for a lot of companies.

Geuze

Wanderer78 wrote: »

if governments go into wide scale austerity, it will cause absolute chaos, as it simply doesnt work

Given that a country can't run a large fiscal deficit forever, therefore it must fall.

Whether reducing the fiscal deficit requires spending cuts remains to be seen.