Irish consumer sentiment recovered strongly in December to stand just short of an eight-year high, a survey showed on Thursday. But the survey's authors warned any recovery in spending in Ireland may be muted as consumers complain improvements in the overall economy are slow to result in more disposable income. The KBC Bank Ireland/ESRI Consumer Sentiment Index rose to 90.5 in December from 85.3 in November. The index hit an eight-year high of 92.8 in September.
"Encouragingly, the details of the December sentiment survey hint that household spending power may be less strained in 2015," KBC Ireland chief economist Austin Hughes said. "However, the sentiment survey implies that many Irish households are cash constrained and cautious in their spending behaviour. So, the increase in consumer outlays in 2015 is unlikely to be spectacular."
Ireland forecasts that the economy grew by almost 5 percent in 2014, likely to be the fastest in the European Union, and data released so far this year showed unemployment falling further, tax receipts soaring and strong services and manufacturing growth.
Separate data on Thursday showed that retail sales rose 0.2 percent month-on-month in November to post an annual jump of 4.7 percent as car purchases rose sharply and clothing, furniture and department store sales recovered. While seven years of tax hikes and spending cuts have come to an end, the 30 billion euros ($35 billion) taken out of the economy as a result has left consumers stretched and resentful at feeling little effect from the recovery, resulting in street protests.