The January reading for Irish consumer sentiment was the strongest reading since February 2001. We think three factors explain this exceptional result. First of all the Irish economy is still set on a strong trajectory and, thus far, has weathered Brexit and other global concerns better than had been feared. This has made consumers more confident about the general economic outlook.
Second, the improving economy is now being felt more broadly by Irish consumers and while it does not appear to be delivering dramatic gains in purchasing power, it is helping to ease household financial strains. Finally, sentiment usually registers a large monthly improvement in January; in four of the past six years, January’s increase was the largest monthly gain of the year. This ‘seasonal’ element of the January increase could be reversed in the next month or two.
Research Area:Macroeconomics Date of Publication: February 12, 2018 Publisher: KBC Bank/ESRI Place of Publication: Dublin
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