Professor Michael McMahon:

When trying to assess what type of economic slowdown or recession we are experiencing now, the key thing is to recognise that at least in the first instance, the economic slowdown is itself a public health measure. Lockdown and isolation of large parts of the economy has been done with the objective of protecting public health. As a result, it is a very different form of recession from those we have seen in the past. As we discuss in the report, that does not mean it will not have ongoing effects. In particular, there are certain sectors of the economy that, even if lockdown were to end in some legal sense, would not adjust back to their previous levels at any speed. As Mr. Barnes outlined in his opening statement, the report examines three scenarios. They are not in any way meant to be the only possible scenarios. There is massive uncertainty about this. The point we stress about why this would be a faster recovery than we saw after the financial crisis is that, in terms of both household and corporate balance sheets and the fiscal position, Ireland went into this crisis in a much healthier state. Of course, the challenges that have come from the Covid-19 pandemic are such that large areas of the economy, a broad cross section of industries, and a broad cross section of different types of households have been adversely affected. That is why in this initial health phase, the "whatever it takes" type support the Government has been pursuing is something we absolutely endorse. How we recover from this will itself depend on some things that are very hard to ascertain.

For instance, at what rate will people decide they are confident enough to go back to shopping in non-essential shops or start to re-engage with the entertainment industries, for example, by going to pubs or restaurants? How these behavioural responses play out will depend on many aspects that are just very difficult to ascertain. Nonetheless, across the phases we believe Ireland is pretty well placed so that most of the sectors can recover. As Mr. Barnes outlined, with some fiscal stimulus in the second phase, that is, in the recovery phase after the initial health impact has been mitigated somewhat, Ireland could be back in approximately two and a half to three years, which, as the Deputy noted, is much faster.