Irish Consumer Confidence Rises as EU Debt Pledge Lifts Outlook
Irish consumer confidence rose to its highest level in almost five years in August after European Union leaders pledged to look at debt options for the country and unemployment stabilized the previous month.
A sentiment gauge rose to 70, the highest since October 2007, from 67.7 in July, as concern about the economic outlook eased, KBC Ireland, a unit of KBC Bank NV, said in a statement in Dublin today. Separate data showed retail sales rose in July by the most this year.
Ireland is emerging from the worst recession in its modern history after a property-market crash was amplified by the global financial crisis. EU leaders said in June they would examine debt options for Ireland, which sought a 65 billion euro ($81.6 billion) aid package in 2010 as the cost of rescuing its banks became too much.
“The big picture is that both the labor market and consumer spending are slowly stabilizing,” Conall Mac Coille, chief economist at Dublin-based securities firm Davy, said in a note today. “The improvement in sentiment seems clearly linked to the commitment by EU leaders to consider additional options to help Ireland’s debt sustainability.”
Retail sales rose 0.7 percent in July from June, the statistics office said. From a year earlier, sales were down 1.5 percent.
While unemployment has tripled since the start of 2008, the statistics office said earlier this month that claims fell by 2,300 in July and the jobless rate held at 14.8 percent.
“The risk that EU leaders fail to provide additional material support to help Ireland’s debt sustainability clearly poses a threat that consumer confidence could fall back,” Mac Coille said.
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