Varadkar predicts Ireland's economy will "take off like a rocket" when pandemic ends

Varadkar predicts Ireland's economy will "take off like a rocket" when pandemic ends

Tánaiste Leo Varadkar anticipates that the Irish economy will “take off like a rocket” after the pandemic.

His optimism comes in the wake of damning new figures showing the rate of redundancies in Ireland to have more than doubled over the past year.

Varadkar, who also holds the office of Minister for Enterprise, was notified by employers about 11,744 redundancies from March to December 2020.

This figure makes for a bleak comparison with the 5,007 proposed job losses over the same period in 2019, with employment legislation requiring employers to flag any planned collective redundancies with the Department for Enterprise beforehand.

Mr Varadkar stressed that figures would have been far worse had the government not intervened with an economic relief package – which covers the Pandemic Unemployment Payment (PUP), wage subsidies, grants, a commercial rates waiver and low-interest loans.

According to the latest figures, over 475,000 people are currently receiving PUP and 189,860 are on the Live Register, with the State subsidy scheme filling in for the lost wages of thousands of people.

These figures may not be a reliable indicator of post-pandemic unemployment levels, however, as many have lost their jobs due to government restrictions, and so are not listed as potential redundancies for the time being.

“We know last year was a really difficult year with so many people losing their jobs and businesses as a result of the pandemic,” Mr Varadkar said, according to The Irish Independent.

Leo Varadkar expects Ireland's economy to quickly recover once the pandemic comes to an end

“Any redundancy is personally devastating for the individual, and I know there is a family behind each one of these figures.

"With Covid, so many people who had secure jobs suddenly did not and the life plans and financial plans they had are now on hold.”

The government will be focusing on providing education and training to those seeking to change careers – even temporarily – to help them to weather the economic storm from Covid-19.

“I believe the Irish economy will take off like a rocket once the pandemic ends and we will be able to return to low levels of unemployment again within a few years,” he said.

As reported by The Irish Independent, Economist Jim Power highlighted that the redundancy figures are far lower than the half-a-million people on the PUP, or the 598,000 on the payment at the peak of the crisis last May.

Mr Power said: “So what’s happening is that most of those workers on the PUP have not been made redundant, and there are workers on other payment supports that allow companies to keep them on the books.

“I think the redundancy figures obviously show a significant deterioration but the magnitude of that deterioration without PUP and the wage subsidy would have been catastrophic," he added.

“However, it is extremely expensive and listening to the Taoiseach at the weekend, I wouldn’t be full of confidence of any turnaround any time soon. Inevitably in 2021 we will see another significant increase in those
redundancy figures.

“Many businesses will decide there is no point going on. The longer this goes on the more long-term damage it will do.”

Economist Alan McQuaid said he expects unemployment rates to remain in double digits after state subsidies are withdrawn.

He said that while “we’ve done better than we thought we’d do in terms of the economy,” it’s important to note that “redundancies are going to rise the longer this thing goes on.

"We are lucky to have pharma and tech firms but you can’t dismiss the fact that the biggest employers are SMEs and they’re the ones suffering when the dust settles.

"They are the ones filling in those redundancy forms.”

Mr McQuaid predicts that while big tech and pharmaceutical companies in Ireland will continue to thrive, and construction is likely to bounce back, the biggest economic casualties will be in the hospitality sector, with pubs and restaurants likely to suffer.