June 23, 2020 / 11:07 PM / 9 days ago

Irish consumer sentiment improves for second month after COVID collapse

FILE PHOTO: A man walks his dog near a closed bar, as the spread of the coronavirus disease (COVID-19) continues, Dublin, Ireland, March 29, 2020. REUTERS/Jason Cairnduff/File Photo

DUBLIN (Reuters) - Irish consumer sentiment improved in June for the second month in a row, but remains well below levels recorded before the onset of the COVID-19 crisis, a survey showed on Wednesday.

The KBC Bank consumer sentiment index climbed to 61.6 in June from 52.3 in May, but remains some distance from February’s pre-pandemic reading of 85.2. In April the index dropped to 42.6 in the sharpest month-on-month decline in the survey’s 24-year history.

The recovery in consumer sentiment mirrors gains in similar indicators for the United States, euro zone and Britain, and suggests the easing of lockdown measures is making consumers feel slightly less negative about the economic outlook, the index compilers said.

“There was a significant improvement in expectations for household finances a year from now but, again, this needs to be seen in context,” said Austin Hughes, chief economist at KBC Ireland. “Only one in 20 consumers envisages better financial circumstances through the next 12 months whereas one in three expects a deterioration.”

Ireland in March shut bars, restaurants and non-essential retail outlets and ordered people to stay at home, but has announced plans to accelerate the reopening of its economy as the rate of COVID-19 infections falls.

Hughes said that fading fears should support stronger spending, but warned that “the cautious tone of responses to

questions on personal finances suggests a still fearful and, in many instances, financially damaged Irish consumer”.

Reporting by Graham Fahy; Editing by Catherine Evans

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