What will the economy look like in 6 months time?

Dorakman · 27-03-2020 12:51pm #1

It’s early days yet of covid-19, however the past couple of days the number of new cases have been in or around 200-250. If all goes well, and the curve is indeed starting to flatten, it begs the question of how our economy will cope? Will this be a short lived depression, which will bounce back relatively quickly, or will we be thrown into a 2008 type scenario?

Summer2020 · 27-03-2020 12:52pm

Nobody has a clue. Anyone who says they know is lying.

NIMAN · 27-03-2020 12:54pm

I'm going to guess it might be a mess!

The doomsday figures released yesterday of 18% unemployment who were based on this lasting 3 months before we get back up and running.

If it last 6 months, 9 months, longer. Who knows what mess we could be facing.

MadYaker · 27-03-2020 12:55pm

I think the government are going to give us all a wad of cash each to get it started again.

justshane · 27-03-2020 12:57pm

I wonder will it be an advantage that it’s a global crisis, rather than a national or European one. The fact we will all be starting from the base might help us recover quickly.

MadYaker · 27-03-2020 1:00pm

The chinese will likely have a big head start if their plan to prevent another outbreak works and will pass out the USA as the leading world super power. They are getting back to normal now while the US and EU are looking down the barrel and will be in disarray for months.

From reading economists online there seems to be two most likely scenarios. If some sort of normality can resume in 8 - 12 weeks then most of the economy that was switched off should be able to come back to life, rehire whatever staff they layed off and resume trading. But if it's longer than that a lot of SMEs will start running into difficulty and apparently they make up 70% of the economy so if they go bust, start laying off staff, stop paying their rents and other loans and mortages on property etc then were looking at a much deeper longer recession.

Mad_maxx · 27-03-2020 1:58pm

Big bounce back

celticWario · 27-03-2020 2:09pm

Dorakman wrote: »

It’s early days yet of covid-19, however the past couple of days the number of new cases have been in or around 200-250. If all goes well, and the curve is indeed starting to flatten, it begs the question of how our economy will cope? Will this be a short lived depression, which will bounce back relatively quickly, or will we be thrown into a 2008 type scenario?

The world economy is essentially dead, think of a chicken with it's head cut off running around, that's where we are right now.

SummerK · 27-03-2020 2:50pm

There's uncertainty at the moment but if we're successful in stopping spread then we can expect normalcy and bounce back after 2-3 months but near term is messy.

Kivaro · 27-03-2020 2:53pm

The question is whether we (the World) learned a lesson about the supply chain during this crisis, and it is not good to have all/most of our eggs in the one basket.
Also, some of the big multinationals will require help from the $2.2 Trillion package, which may require them to leave Ireland and return to the States.

Interesting times ahead .....

27-03-2020 2:56pm

Id be suprised if it didnt sink at least one of the banks tbh and needing another bailout,

Though rest of econmy probably be ok,as food/pharma exports are still going to be needed surely

But many rural towns,which rely heavily on american tourism may find it very difficult to recover,unless government initative to encourage more staycations can be brought in(these may be more common this as large parts of the world are facing into lockdowns for rest of year,probably)

Kermit.de.frog · 27-03-2020 2:57pm

Dorakman wrote: »

It’s early days yet of covid-19, however the past couple of days the number of new cases have been in or around 200-250. If all goes well, and the curve is indeed starting to flatten, it begs the question of how our economy will cope? Will this be a short lived depression, which will bounce back relatively quickly, or will we be thrown into a 2008 type scenario?

Hard to say because the problem is not structural in the economy like in 2010.

In theory the bounce should be fast. A lot of those temporarily laid off will return to work quickly.

But it really depends on the length of the lock downs.

petros1980 · 27-03-2020 3:01pm

MadYaker wrote: »

I think the government are going to give us all a wad of cash each to get it started again.

Wads of cash from where? The aftermath of this is going to be worse than 2008. Massive borrowing + plummet in tax intake. Markets for further borrowing getting tighter and tighter. Hope I'm wrong....

Dorakman · 27-03-2020 3:05pm

Kermit.de.frog wrote: »

Hard to say because the problem is not structural in the economy like in 2010.

In theory the bounce should be fast. A lot of those temporarily laid off will return to work quickly.

But it really depends on the length of the lock downs.

True. I live in the city centre and can’t help wondering how many pubs doors have shut for good?

Dorakman · 27-03-2020 3:06pm

petros1980 wrote: »

Wads of cash from where? The aftermath of this is going to be worse than 2008. Massive borrowing + plummet in tax intake. Markets for further borrowing getting tighter and tighter. Hope I'm wrong....

We do have the 3 billion reserve from the no-deal Brexit fund, so hopefully that absorbs some of the costs.

Gavlor · 27-03-2020 3:10pm

petros1980 wrote: »

Wads of cash from where? The aftermath of this is going to be worse than 2008. Massive borrowing + plummet in tax intake. Markets for further borrowing getting tighter and tighter. Hope I'm wrong....

Only corporate debt markets are getting tighter. Plenty of scope to keep rising the ceiling on govt debt.

suicide_circus · 27-03-2020 3:12pm

who are the big financial winners here? medical supplies manufacturers...who else?

TuringBot47 · 27-03-2020 3:13pm

celticWario wrote: »

The world economy is essentially dead, think of a chicken with it's head cut off running around, that's where we are right now.

No... that's a limited perspective.
There's a lot of demand for highly skilled workers and people in I.T./office workers are still continuing to work through this crisis at home.

The manual labourers and public facing workers are temporarily being laid off.
As soon as the credit flows back in the system the businesses will reopen and start to take on staff again. Maybe they'll slowly build up their business again and not rehire 100% of the workers until their business is back at previous levels so there may be a delay.

TuringBot47 · 27-03-2020 3:15pm

suicide_circus wrote: »

who are the big financial winners here? medical supplies manufacturers...who else?

Undertakers.
Aldi/Lidl.
Internet providers/Netflix.
Maybe Google, with all the extra internet browsing their advert revenue must be multiple times the norm.
Online education.

Limpy · 27-03-2020 3:20pm

I remember 10 year's ago the Irish fans used to chant "you only shop in Lidl" to the Polish fans.

Times have changed.

mariaalice · 27-03-2020 4:54pm

Thinks will bounce back but it will be different, a huge amount of people who are working from home now will continue to do so and that will have knock-on effects in all sort of ways.

MadYaker · 27-03-2020 5:03pm

petros1980 wrote: »

Wads of cash from where? The aftermath of this is going to be worse than 2008. Massive borrowing + plummet in tax intake. Markets for further borrowing getting tighter and tighter. Hope I'm wrong....

The ECB are going to print money and dole it out to the euro zone countries on 100 year terms with tiny interest. This is what the economist from the ESRI I heard on the radio thinks anyway. He thinks we can get away with it this time because everyone is suffering the same crisis so currency devaluation isn’t as much of an issue and the ECB rarely just prints money like that. Who knows really but I think we can definitely expect to see some unorthodox solutions.

nigeldaniel · 27-03-2020 5:12pm

Hard to say whats what with the economy. If the US gets a bad dose of the yoyo's then it will stick to us like a limpet. Not nice at all. If on the other hand the US and to a lesser point China gets a grip on all its debts things might have a silver lining. Ireland at least has a small population which could be its saving grace.

An Ri rua · 27-03-2020 5:14pm

Summer2020 wrote: »

Nobody has a clue. Anyone who says they know is lying.

Of course some do.

While they can't tell you how bad it will be, they can certainly map out how lost consumption, on a weekly basis, affects the economy. It's list consumption. Even if it's subsidised by fiscal or monetary interventions, the citizens will take the hit.

murphyebass · 27-03-2020 6:36pm

When we get all that money apple owes us we’ll be grand sure.

Yurt2 · 27-03-2020 6:42pm

Summer2020 wrote: »

Nobody has a clue. Anyone who says they know is lying.

The people doing the thinking and who have the ears of descision makers do. Perhaps you should listen up and pay attention. The conversation is underway and all over the global media and pink press.

TuringBot47 · 27-03-2020 6:52pm

mariaalice wrote: »

Thinks will bounce back but it will be different, a huge amount of people who are working from home now will continue to do so and that will have knock-on effects in all sort of ways.

That's a very good point.

Less people paying for monthly/annual bus/train passes.
So public transport might be less crowded, but less funded.

Traffic should be a bit lighter.

Impact on coffee shops/restaurants/delis around offices.

Less people in the pubs in city centre after work.

Maybe less need for creches as offices/IT companies embrace working from home at flexible work hours. Less need for the black market of minding kids while people are working/after school collection.

Conversely, people working from home will have more time and money to spend locally, effectively decentralising some spending.

It could also help rural life, allowing more people to work from home without needing to live within commuting distance of major cities. That could reduce rental pressures.

Yeah, this Corona crisis could really reset our ideas of work/lifestyle.

The One Doctor · 27-03-2020 6:56pm

Dorakman wrote: »

True. I live in the city centre and can’t help wondering how many pubs doors have shut for good?

There's way too many pubs as it is.

Expect to see Wetherspoons come it and nab all the remains.

_Brian · 27-03-2020 7:01pm

mariaalice wrote: »

Thinks will bounce back but it will be different, a huge amount of people who are working from home now will continue to do so and that will have knock-on effects in all sort of ways.

People said after 9/11 and even the 08 financial meltdown that things would be different. But they drifted back to the old system.
This will be little different.

Elemonator · 27-03-2020 7:05pm

MadYaker wrote: »

The chinese will likely have a big head start if their plan to prevent another outbreak works and will pass out the USA as the leading world super power. They are getting back to normal now while the US and EU are looking down the barrel and will be in disarray for months.

From reading economists online there seems to be two most likely scenarios. If some sort of normality can resume in 8 - 12 weeks then most of the economy that was switched off should be able to come back to life, rehire whatever staff they layed off and resume trading. But if it's longer than that a lot of SMEs will start running into difficulty and apparently they make up 70% of the economy so if they go bust, start laying off staff, stop paying their rents and other loans and mortages on property etc then were looking at a much deeper longer recession.

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

I wouldn't say so. The Chinese economy isn't predicted to surpass the USA until the 2030's. It's a global phenomenon. Militarily, there isn't a country that could hold a candle to the USA, even without NATO. They are the only country that truly has the logistics for global military intervention.

Harry Palmr · 27-03-2020 7:07pm

It'll be smaller fitter as all the poorly run, overpriced retail and other service companies are weeded out.

27-03-2020 7:08pm

Elemonator wrote: »

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

I wouldn't say so. The Chinese economy isn't predicted to surpass the USA until the 2030's. It's a global phenomenon. Militarily, there isn't a country that could hold a candle to the USA, even without NATO. They are the only country that truly has the logistics for global military intervention.

The US is heading towards civil war,if they keep up partisan politics surronding this virus

I know,if someone belonging to me died because some dipsh1t politian decided to take chances to piss people off over politics....noway i would let it lie

Edgware · 27-03-2020 7:13pm

I know a couple of "ladies" who work from home but they say it has never been so quiet

The One Doctor · 27-03-2020 7:24pm

Edgware wrote: »

I know a couple of "ladies" who work from home but they say it has never been so quiet

Maybe ask for a two for one?

TuringBot47 · 27-03-2020 7:29pm

Deleted User wrote: »

The US is heading towards civil war,if they keep up partisan politics surronding this virus

That sort of hysteria would be met with a slap to the face in older times.
I'm too lazy to link it to the Airplane movie clip where a load of them lined up to slap a hysterical woman in the face.

There's a percentage of people who are overwhelmed with fear and anxiety and projecting it out to society in general that we'll all revert to animals and attack everything. That anarchy will reign.

It won't.

Yurt2 · 27-03-2020 7:32pm

TuringBot47 wrote: »

That sort of hysteria would be met with a slap to the face in older times.
I'm too lazy to link it to the Airplane movie clip where a load of them lined up to slap a hysterical woman in the face.

There's a percentage of people who are overwhelmed with fear and anxiety and projecting it out to society in general that we'll all revert to animals and attack everything. That anarchy will reign.

It won't.

It's a message board. Speculation is permitted. You've engaged in it in the above post as well, so deal with it.

TuringBot47 · 27-03-2020 7:33pm

Yurt! wrote: »

It's a message board. Speculation is permitted. You've engaged in it in the above post as well, so deal with it.

I have, in a positive way.

27-03-2020 7:39pm

TuringBot47 wrote: »

That sort of hysteria would be met with a slap to the face in older times.
I'm too lazy to link it to the Airplane movie clip where a load of them lined up to slap a hysterical woman in the face.

There's a percentage of people who are overwhelmed with fear and anxiety and projecting it out to society in general that we'll all revert to animals and attack everything. That anarchy will reign.

It won't.

Hmm....i dont think its hysteria tbh

Ive pointed out,how id react in such a scenario....

if your happy enough to let your relatives die for partisan issues,your welcome to do.so....i suspect yous are in a minority mind

diggerdigger · 27-03-2020 7:40pm

With the amount of money printing going on, I wouldn't be surprised if global central banks over egged it and we hit a sustained period of high inflation in a bounce back aftermath.

If the "event" is sustained for more than 2 quarters, then I'd speculate we'd blow structural holes in the global economy.

Sleeper12 · 27-03-2020 7:45pm

Summer2020 wrote:

Nobody has a clue. Anyone who says they know is lying.

I know but I'm not telling

Yurt2 · 27-03-2020 7:57pm

TuringBot47 wrote: »

I have, in a positive way.

The poster's speculation wasn't an unreasonable one; it was grounded in the state of affairs of the US and the severity of the problem facing the country.

There's no requirement to be positive or negative

Yurt2 · 27-03-2020 7:58pm

diggerdigger wrote: »

With the amount of money printing going on, I wouldn't be surprised if global central banks over egged it and we hit a sustained period of high inflation in a bounce back aftermath.

If the "event" is sustained for more than 2 quarters, then I'd speculate we'd blow structural holes in the global economy.

It's an extremely difficult balancing act they have to perform. You'd wonder what central banks have modeled such an event, very few you'd think.

mariaalice · 27-03-2020 8:11pm

_Brian wrote: »

People said after 9/11 and even the 08 financial meltdown that things would be different. But they drifted back to the old system.
This will be little different.

The technology is different now though and it was already a trend this just accelerated it.

Montage of Feck · 27-03-2020 8:12pm

Like 28 days later, but hopefully without zombies.

Dorakman · 27-03-2020 8:16pm

Montage of Feck wrote: »

Like 28 days later, but hopefully without zombies.

There are zombies already that feast on change for a hostel.

xzanti · 27-03-2020 8:37pm

Edgware wrote: »

I know a couple of "ladies" who work from home but they say it has never been so quiet

Would you go buying Avon in this current climate?

Fred Cryton · 27-03-2020 8:56pm

Big bounce back in second half of year.

There are still around 2 million in work, presumably earning the same amount in March as in February.

By taking these measures, the government has essentially forced those 2 million workers to save cash like they've never saved before. Within 3-4 months, there will be an absolute tsunami of cash ready to be unleashed into the economy. Think of the number of people dining out, in pubs and taking holidays/hotel breaks later in the year.

This is very different to '08. I still think there's a chance the Irish economy will have overall positive growth in 2020, such will be the comeback in spending in Q3 and Q4.

jimmyrustle · 28-03-2020 12:07pm

Deleted User wrote: »

Id be suprised if it didnt sink at least one of the banks tbh and needing another bailout,

Here's something I've never quite understood.

What happens when someone owes a debt to a dead bank?

In the last crisis, I assume seeing if AIB et al had been allowed to die, people who took out mortgages during the boom would owe their payments to whoever AIB borrowed that money off.

But what about people in 2008 who had taken a mortgage in the early 90's, back when, I assume, things hadn't went mad and banks were using funds that belonged to them to loan out for mortgages? Would they have had the debt wiped, as they owed it to nobody?

My mate had a similar welcome twist of fate some years ago when a drug dealer he owed 300 euro to for coke had his head blown off :pac: If the creditor ceases to exist surely the debt dies?

jimmyrustle · 28-03-2020 12:11pm

Fred Cryton wrote: »

Big bounce back in second half of year.

There are still around 2 million in work, presumably earning the same amount in March as in February.

There are 2 million people working in total when the economy is good.

This morning that has been slashed to only a select few in food retail, healthcare, deliveries.

Anyone outside of these sectors who can't work from home is now unemployed. Some wil get this 70 percent income top up, a lot, like myself, will not. Which doesn't seem very fair.

I agree though, there is a lot of shopping and drinking to be done in a few weeks.

One thing I do wonder is whether we will see the permanent raising of the price of a pint/ a takeaway etc in order to recoup the losses they have been experiencing by and large since before paddy's day.

Palmach · 28-03-2020 12:11pm

jimmyrustle wrote: »

Here's something I've never quite understood.

What happens when someone owes a debt to a dead bank?

In the last crisis, I assume seeing if AIB et al had been allowed to die, people who took out mortgages during the boom would owe their payments to whoever AIB borrowed that money off.

But what about people in 2008 who had taken a mortgage in the early 90's, back when, I assume, things hadn't went mad and banks were using funds that belonged to them to loan out for mortgages? Would they have had the debt wiped, as they owed it to nobody?

My mate had a similar welcome twist of fate some years ago when a drug dealer he owed 300 euro to for coke had his head blown off :pac: If the creditor ceases to exist surely the debt dies?

The liquidator would come looking for the debts if a bank went bust. Usually when banks are failing they sell off assets which includes monies owed and the buyers usually other banks would persue these debts.

McGiver · 28-03-2020 12:19pm

MadYaker wrote:

I think the government are going to give us all a wad of cash each to get it started again.

You think?

Irish public debt is 110% as % of GNI. Heavily indebted. Go to any higher and a crash worse than the FF one is imminent.

What will the economy look like in 6 months time?

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