Shop local, says Donohoe, it’s the key to a post-pandemic rebound

Finance Minister Paschal Donohoe is urging people to shop local to ensure Ireland has a post-pandemic economic boom.

Mr Donohoe said the key to the economy bouncing back after a year of lockdowns was for shoppers to support Irish businesses when they reopened in the coming weeks

“Shopping locally, supporting our retailers when they open up will help our country get back to work,” he told the Irish Independent.

“There is every prospect of a strong economic rebound if this happens and a rebound is the first step in our recovery,” he added.

Tánaiste and Enterprise Minister Leo Varadkar also predicted the easing of restrictions would result in a significant increase in consumer demand as people dipped into savings they had built up throughout the pandemic.

“There may even be a mini-boom if all goes well,” Mr Varadkar told the Irish Independent. “There’s billions of savings put aside from those who have been able to continue working.

“This spending boost would be great for the economy and hopefully allow even more people to return to work and businesses to survive.”

Consumer spending was down significantly in the first three months of this year due to the imposition of Level 5 restrictions.

However, the Department of Finance is projecting it will grow by 3.5pc overall this year.

The department is also forecasting unemployment will drop from 24pc currently to 11pc by the end of the year.

It is also hoped that personal spending by households on goods and services will increase from €23.8bn in the first quarter of 2021 to €27.5bn in the final three months of the year.

The Government is confident there will be a significant increase in spending in the tourism, hospitality and retail sectors in the coming weeks and months as restrictions area eased.

Non-essential retail can resume click-and-collect services on May 10 before reopening fully a week later.

This will allow major high-street chains, small retailers and department stores reopen their doors to customers for the first time since they closed at Christmas.

It will be another month before bars, restaurants and hotels will be permitted to resume business.

Hotels, guesthouses and B&Bs will reopen on June 2 while bars and restaurants will be able to serve customers outdoors five days later on June 7.

There is anger among bar and restaurant owners who will not be allowed to serve customers outside, while hotel owners are permitted to provide indoor dining.

However, the Government is determined to stick to the National Public Health Emergency Team (Nphet) recommendation to focus on outdoor activities during the early summer months while the HSE is still vaccinating people.

Indoor dining and drinking will be considered as part of a reopening plan for July.

A range of business and employee supports will remain in place for the coming moths as will the 9pc VAT rate for the hospitality sector to ensure reopening is as viable as possible for most businesses.

However, the Tánaiste warned it is also likely that after the summer months, spending will taper off in the autumn.

“The Government will try to avoid withdrawing financial supports from businesses and people just when the consumer spending starts to drop again,” he said.

“Instead, there will be a gradual tapering at a later point as we exit the pandemic.

“And we will continue to support enterprise and reward work to make sure that the economy recovers quickly.

“We do need to remember that much of this spending is being done with borrowed money. This wasn’t raised from labour, profits or income generated in Ireland, it’s been borrowed on the international money markets.

“And it will need to be serviced and paid back. So the best way to do that, now and into the future, is by making sure the economy continues to grow as rapidly as possible.”

“A bigger economy will be able to service a higher debt,” he added.