DUBLIN (Reuters) -Irish consumer sentiment dropped sharply for the second month in a row in April to its lowest level in two years as the impact of U.S. tariffs on Ireland’s potentially vulnerable economy raised fears for future growth, a survey showed on Tuesday.
Mirroring similarly steep declines in other economies, the Irish Credit Union Consumer Sentiment index fell to 58.7 from 67.5 in March and 74.8 in February, before U.S. President Donald Trump ratcheted up his tariff threats.
Research co-authored by the Irish finance ministry has found that Ireland faces a disproportionate hit from U.S. tariffs on the European Union which, if permanent, could cause Ireland’s currently fast-growing economy to be as much as 1.8% smaller than it otherwise would be by 2032.
April’s drop in sentiment, which is now materially weaker than the consumer survey average of 84.1, was driven by a pronounced hit to expectations for the year ahead compared to current spending plans, which suffered the smallest drop.
The survey’s authors said any reining-in of spending driven by caution should therefore be notably less traumatic than one caused by actual income or job losses.
While the 8.7-point month-on-month drop was also the steepest since September 2022, it was only the fifth-largest in the past five years, during which time the Irish economy has weathered COVID-19, cost-of-living and Brexit shocks.
“On balance, we think that the current reality for Irish consumers is one of improving although still very varied circumstances in household incomes,” the authors said.
“The risk of a poorer outlook for household incomes is large but it is still latent. We think any pullback in Irish consumer spending in coming months will be modest in the absence of a further marked deterioration in the broader economic outlook.”
(Reporting by Padraic Halpin; Editing by Freya Whitworth)
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