Irish economy unlikely to escape coronavirus unscathed - former Irish Exporters Association boss
Experts are scrambling to assess the potential fallout on the economy here should the coronavirus spread into a pandemic, with a leading commentator recalling the devastating effects of the foot and mouth outbreak on tourism and agriculture almost 20 years ago.
John Whelan, a former head of the Irish Exporters Association, who heads up the trade consultancy the Linkage Partnership, said the after-shocks from the economic fallout on China, the world’s second-largest, will spread to Germany and other economies, which hoped to stage recoveries this year.
From an Irish point of view, “between Brexit and the virus, it is a worrying time for all businesses”, Mr Whelan said.
The difficulty is that if other markets like China grind to a halt it does spell a situation where the Irish economy could spiral downwards. I can’t see how the Irish economy can come out of this unscathed.
University College Cork economist Seamus Coffey, the former chair of budget watchdog the Irish Fiscal Advisory Council, said the coronavirus outbreak is a “left-field” event that no one predicted, and businesses will be hoping that it does not grow to have a similar effect on the economy as the foot and mouth outbreak.
Peter Brown, who heads up Baggot Investment Partners, said it was also a pivotal time for investors and people saving for their pensions.
The coronavirus effects could mean the world economy is only slightly damaged but the global recovery is left unharmed.
However, if the virus were to bloom into a pandemic and world growth were to be permanently scarred, then stock markets would fall again and investors would flee shares, Mr Brown said.
“It’s on a knife-edge,” the veteran market commentator told the Irish Examiner.
Conall MacCoille, chief economist at broker Davy, said the tourism and travel industries were “the first and foremost” exposed, in the short term.
But he said that typically if the disruption was shortlived over a month or two, that consumer spending would only be deferred and the economy would bounce back.
Mr MacCoille thought it unlikely that multinationals such as Google and Facebook which have significant facilities in Ireland, would be affected.
However, the supply chains of German car manufacturers and technology firms, which rely on rare earth materials, would likely be in the front line, Mr MacCoille said.
