The agriculture sector will be hit but fare better than many other sectors during the economic storm sparked by the coronavirus pandemic.
Minister for Finance Paschal Donohoe and his department have published a Draft Stability Programme Update which shows that agriculture, along with ICT and public administration, education, and health are the only sectors that will not see their GDP completely plummet this year.
This projection is in line with that of the ESRI, which recently predicted that agriculture would not be as severely affected as other sectors.
Clearly now in the midst of severe depression both domestically and globally
However, the level of off-farm finance and employment that many farmers depend upon to support their overall incomes was not taken into account.
Minister Donohoe warned that the country was “clearly now in the midst of severe depression both domestically and globally”.
Overall, Irish GDP is set to fall by 10.5% this year and unemployment is set to peak at 22% this quarter.
The key to economic recovery lies in the country’s ability to contain the virus and Minister Donohoe warned that current projections were based on current restrictions remaining in place for another 12 weeks before easing.
“Our projections today assume that the current containment measures remain in place for 12 weeks and that they are gradually eased thereafter,” Minister Donohoe said.
“But that scarring effect and uncertainty means that recovery in the second half of the year in our economy will be gradual. If containment measures are not lifted and if this is a function of what is happening with our public health then the economic effect will clearly be more severe
“Some sectors will recover faster than others and we believe that it will be approximately 2022 before we see economic activity begin to resemble or match where we were at the pre-crisis level.”
He maintained that once the pandemic was over, the economy would recover. The recovery projections are also contingent on the EU and UK reaching a free-trade agreement at the end of the transition period by December 2020.