DUBLIN Irish consumer sentiment recovered from a post-Brexit fall last month, a survey showed on Wednesday, returning to levels seen for most of the last 12 months in a cautiously optimistic sign for the economy.
Ireland is considered to have more to lose than any other EU economy from its nearest neighbour and key trading partner's decision to leave the European Union, and consumer confidence sank to its second-lowest reading of the year following the June 23 vote.
But the KBC Bank Ireland/ESRI Consumer Sentiment Index rose to 102.7 in August from 99.6 in July, putting it a touch below the reading in June although still lower than the 15-year high of 108.6 hit in January.
"The Brexit vote didn't cause the economic sky to fall even if it made it a lot cloudier. As a result, consumers reassessed both the timing and extent of the damage that it might cause the Irish economy," KBC chief economist Austin Hughes said.
"However, the fact that the August sentiment reading merely matches the average of the previous 12 months suggests there is also a distinct absence of a broadly based 'feel-good factor."
Ireland's economy is set to be the fastest growing in the European Union for the third successive year in 2016, with a 4.9 percent expansion forecast. But many feel the recovery has been slow to filter through much of the economy.
Hughes said Irish consumers were caught between the promise of a recovering economy and the pressures of strained household finances, while at the same time trying to understand the implications of unpredictable developments such as Brexit.
"They appear to be waiting for a clearer picture in regard to the general economic outlook as well as what may happen to their own spending power before confidence effects impart any major boost to household spending," Hughes said.
(Reporting by Padraic Halpin; Editing by Hugh Lawson)