Obviously it depends on how long the pandemic lasts, how many people die unfortunately, etc.
However recessions that are caused by pandemics usually are quiet short and the economy usually rebounds strongly once it passes. All those people locked up at home, who can't wait to get out and get back to the pubs, restaurants, gyms, etc. and start spending.
I think this recession will be quiet different to 2008. As you say, the Irish industry and economy went into this healthy. Pharma and medical equipment made here will obviously do well. But IT is also doing very well through this due to everyone working from home and discovering cloud services, etc. and of course there is always the need for financial services and agriculture.
BTW I think countries will look to pull back the manufacture of PPE, etc. from China only to Europe/US and I think Ireland could be well placed to benefit from that on an EU wide basis.
Of course tourism, airlines, retail, restaurants, etc. will suffer in the short term and may take time to bounce back. Specially international tourism might take quiet a while for people to trust travelling internationally again.
I'd agree with the report that says we will be one of the countries who suffers the least.
I'd also say that we won't see austerity type budgets. Quiet the opposite in fact for a number of reasons.
2008 was different because we were so directly hit by it, the cost of government lending went WAY up due to it be a financial crisis, hell folks might not remember, but the government was worried if they would even be able to borrow at any cost! Austerity was necessary then because of the circumstances and it was also forced on us by the Troika.
This time around, the cost of government lending is at an all time low and Irish bonds are particularly attractive given the overall health of our economy. Not only is their no appetite for austerity by FG/FF, but there is non across Europe and most of the rest of the world.
Governments around the world saw how damaging it was and how it led to the rise of the far right. Also it just doesn't make any sense for a recession like this.
With this sort of recession, once the pandemic is dealt with, the correct move is too pour money into economies to restart them as quickly as possible, to have people feel comfortable to go back out and start spending again. Austerity doesn't make sense it this case, as it would just drag it out and likely lead to a worse depression.
And I haven't seen any government suggest that, they are all talking about printing money, etc. once the lock down is over.
So if anything I'd think we should absolutely be investing in infrastructure like Metrolink, etc. Money will be cheap and it can help employ people who are laid off from retail, restaurants, etc. that might be slower to restart.
Of course we need to beat this pandemic first.
Last edited by bk; 01-04-2020 at 13:24.