May 1, 2019 / 11:19 PM / 22 days ago

Worsening Irish consumer sentiment erases March recovery

DUBLIN (Reuters) - Irish consumer sentiment soured in April, weighed down by an uncertain economic outlook and related worries about household incomes, data showed on Thursday.

The KBC Bank/ESRI consumer sentiment index fell to 87.7 in April from 93.1 in March, largely erasing a partial recovery from February’s 51-month low of 86.5.

April’s weakness “reflects the difficulty the typical Irish consumer is having in assessing how various threats may affect the Irish economy and their own household finances in the year ahead”, said Austin Hughes, Chief Economist, KBC Bank Ireland.

“At the margin, higher energy bills and other increases in living costs may have made consumers a little more cautious in April.”

Despite being widely seen as the EU country with the most to lose from Brexit, Ireland weathered initial concerns stemming from Britain’s 2016 referendum vote, which failed to interrupt a run of five straight years as Europe’s fastest growing economy.

But the Irish central bank has said that if Britain crashes out of the EU without a deal it could knock as much as 4 percentage points off Ireland’s growth rate in the first full post-Brexit year.

The survey’s authors said there was little clarity on Brexit during the survey period, and while the likely postponement of the UK’s exit lessened the near-term risks, the shadow cast by the current uncertainty is a drag on Irish consumer sentiment.

They said Irish consumers are currently positioned for bad news. “Only one in five consumers now expects the Irish economy to strengthen in the next twelve months whereas two in five see it becoming weaker.”

Reporting by Graham Fahy; Editing by Mark Heinrich

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