Irish consumer sentiment slumped to its lowest level in over a year in May as optimism about Ireland's economic outlook deteriorated in the European Union's fastest growing economy, a survey showed on Tuesday. The KBC Bank Ireland/ESRI Consumer Sentiment Index fell to 98.1 in May from 102.7 in April, its lowest level since March 2015. The index hit a 15-year high of 108.6 in January.
While consumers did not report a significant fall in their current financial circumstances, they were less optimistic about future employment prospects and their personal financial situation twelve months from now, the survey's authors said. The survey "points towards a more nervous consumer who is a little less confident in the outlook for the Irish economy and disappointed with the development of their own household finances," KBC chief economist Austin Hughes said.
He said uncertainty about the global economy also appeared to be weighing on sentiment. Ireland outperformed the rest of the euro zone for the second time last year, growing by 7.8 percent with gross domestic product forecast to grow 4.9 percent this year.
But the country was without a government for ten weeks after an inconclusive February 26 election in which voters expressed anger that they were not feeling the recovery in their personal finances. Prime Minister Enda Kenny was re-elected as head of a minority government earlier this month. Of respondents to the May survey, 49 percent said they expected the Irish economy to strengthen in the next twelve months, but that was down from 62 percent in the January survey. Expectations of future jobs prospects to their weakest reading in two years, the survey said, as high profile lay-offs and industrial action overshadowed a steady fall in the unemployment rate.