Irish consumer sentiment recovered in January, reversing a sharp drop recorded following the Budget in December.

The KBC Ireland/ESRI Consumer Sentiment Index rebounded to 64.2 in January from 49.8 in December.

Respite from financial and economic news flows over the Christmas period may have contributed to a slightly less fearful Irish consumer in January, according to KBC. Heavy price discounting in Christmas sales also brought seasonal improvement in the buying climate.

KBC said the volatility of the market through the second half of 2012 and the beginning of 2013 "highlights the fragility of sentiment and the degree of nervousness that the average Irish consumer feels about economic and financial prospects".