Irish consumer sentiment dropped in April as higher borrowing costs, disappointing economic data and the publication of an even larger bill for bailing out the banks weighed, a survey showed today.
The KBC Ireland/ESRI Consumer Sentiment Index weakened to 57.9 in April from 59.5 in March, reversing about 10 per cent of the sentiment gains recorded during the first quarter of 2011.
"The surprise in terms of the April sentiment results is not that Irish consumer confidence weakened last month, but that the decline was very limited," said Austin Hughes, chief economist KBC Bank Ireland.
Irish consumer sentiment has, however, held up better when compared with falls in other European countries, possibly due to a long run of bad economic news centred around the state of the Irish banks.
The Government said on March 31st that the lenders will need an additional €24 billion in capital on top of the €46 billion in funds already poured in.
Mr Hughes said given Irish consumers' acceptance of a tough year ahead the government may be able to drum up some confidence this week with its planned jobs programme.
"Consumers that feel they have adjusted to a fairly tough 'new normal' might also draw significant encouragement from a well-crafted government jobs initiative that is seen to improve Irish employment prospects," he said.
Ireland's government plans to unveil a jobs initiative tomorrow designed to help reduce the country's unemployment rate from its current level of nearly 15 per cent.
But ministers have already admitted that they don't have the funds for a big job-creation initiative and tomorrow's plan will be more about boosting morale.
The KBC Ireland/ESRI Consumer Sentiment Index showed that nearly two thirds of consumers expect higher unemployment and over half express concern about the economic outlook over the next 12 months.
Reuters
