Ireland’s July stimulus plan to help firms hit by the economic lockdown and subsequent restrictions to control the spread of coronavirus will be a sizable package to meet the scale of the challenge, new Prime Minister Micheál Martin said on Monday.
The plan was included in the coalition government’s policy programme laid out earlier this month, which said it would be centred around a new recovery fund targeting increased domestic demand and employment.
The programme pledged that additional grants for small businesses will be considered as part of the package, which will also set out the future direction of the state’s wage subsidy – currently due to run until at least the end of August.
“This will be a sizable package that has to meet the challenges of our time and they are very, very significant challenges,” Martin told a news conference, adding that it was too early to say how much the plan would cost.
“The important thing of the July stimulus is what will work quickly in terms of getting jobs back.”
Business Minister Leo Varadkar, whom Martin took over from as prime minister on Saturday, said the country was potentially facing mass insolvencies of businesses, meaning the government must act fast with a plan by the second or third week of July.
The percentage of the workforce either temporarily or permanently unemployed stood at 26.1% at the end of May.
Data on Monday showed that while Irish retail sales rose 29.5% month-on-month in May, a rebound that reflected both the partial reopening of the economy and a record drop in April, they were still 26.6% lower than a year ago.
The “very limited rebound” from earlier losses reinforced the case for significant stimulus to avoid a double digit drop in consumer spending drop this year, KBC Ireland Chief Economist Austin Hughes wrote in a note.