Consumer confidence has fallen to an 18-month low amid concerns over the cost of living and the war in Ukraine.
According to the latest KBC Bank Ireland consumer sentiment survey, consumers are being more pessimistic about their spending plans.
The latest index fell from 67.0 in March to 57.7 in April, which is significantly lower than the average 86.6. Previously, there had been a 10 point drop seen between February and March.
The cumulative 24 point decline in the survey over the three months from February to April is the second largest in the 26-year history of the survey.
The survey found that seven out of 10 consumers expect the Irish economy to be weaker in twelve months’ time while nearly half expecting unemployment to be higher.
It also found that consumers had increased concerns over higher food prices.
As reported in the Irish Examiner, KBC's chief Economist, Austin Hughes, said there is no surprise with the decline in consumer sentiment.
"In light of the pronounced upward pressure on energy costs, both actual and announced, as well as markedly increased concerns in relation to food prices, it is scarcely surprising that there was a marked downgrade both of the trend in household finances through the past year and the outlook for the next 12 months," Mr Hughes said.
When asked ‘How would your household deal with an unexpected financial emergency costing €1000?', 12 per cent of consumers said they could deal with an unexpected financial cost amounting to €1,000 out of their current income.
Meanwhile, seven per cent said that they could not handle such an expense through any funds or financial capacity available to them.
"The details suggest some weakening compared to a year ago that likely reflects both the recent sharp rise in inflation and the drawdown of savings built up in the pandemic," Hughes said.
