DUBLIN, Jan 28 (Reuters) - Ireland’s economic recovery is still likely to resemble Nike’s upwardly curving swoosh, but it will be weaker than expected in the first quarter before picking up faster in the second half, the finance ministry’s chief economist said on Thursday.
Ireland’s finance ministry forecast in October that modified domestic demand, a measure that strips out some of the elements that can distort Irish gross domestic product, would expand by 4.9% this year after an estimated 6.1% drop in 2020.
The 2021 forecast assumed a disorderly Brexit, which did not occur, but also a less severe set of COVID-19 restrictions than the shutdown of most shops, building sites and the entire hospitality sector that was imposed from late December.
Similar lockdowns throughout Europe have also meant that the international environment is much worse than the forecasters had predicted, John McCarthy told a news conference.
“The way I would describe it is worse in Q1 but probably better in the second half, so that Nike swoosh we sometimes talk about will be deeper in Q1 and picking up faster in the second half,” McCarthy said, referring to the athletic shoe maker’s logo, which gently curves upward from left to right.
While data on Thursday showed that retail sales in December were 8.2% higher than the same pre-pandemic month last year, the number of people temporarily unemployed has grown by 71% since the end of December.
Finance Minister Paschal Donohoe said a number of indicators gave him confidence that the high level of personal savings and inherent resilience in major parts of the economy would lead to a strong recovery in the second half of the year and in 2022. (Reporting by Padraic Halpin, editing by Larry King)