The election has not produced an economic "feelgood" factor among consumers, who became more pessimistic about their financial situation this month.
A spate of layoff announcements, high inflation rates and the eighth rise in interest rates in 18 months prompted a fall in consumer sentiment in June, according to the latest IIB Bank / Economic and Social Research Institute (ESRI) index.
Fears about job prospects were at the forefront of consumers' concerns, with the proportion of people who think unemployment will rise in the coming year climbing to 58 per cent in June, up from 52 per cent in May.
The bad news served to undo an improvement in consumer sentiment the previous month.
The consumer sentiment index, which fell from 85.7 in May to 83.2 in June, showed that consumers are becoming more negative about both their current personal financial situation and their expectations for the next 12 months. The index is compiled from more than 900 telephone interviews with consumers.
"These data suggest the distinct absence of any feelgood factor that might signal a honeymoon period for the new Government," said Austin Hughes, chief economist at IIB Bank.
Pressures relating to the cost of living, especially in relation to borrowing costs, need to be tackled quickly by the Government in a credible manner, Mr Hughes said.
The slip in consumer sentiment reflects several significant job loss announcements, including those at Eircom, Lapple Ireland and Conor Medsystems, as well as ongoing fears of possible job cuts in Dell. Inflation, which is running at 5 per cent, is also contributing to a situation where consumers are "extremely cautious" at present, the economist added.
The "apparently endless" series of increases in monthly mortgage repayments is undoubtedly having a major impact on household finances, he said. A further hike in interest rates is likely in the autumn.
Mr Hughes said that tackling inflation and cushioning the impact of higher borrowing costs must be key priorities for the new Government. His comments follow a call by the Irish Congress of Trade Unions for the Government to increase the tax relief available on mortgage interest payments.
