At this point it’s impossible to predict the economic impact of the current public health crisis, however all the indications are that the underbelly of the US Economy is fragile and the Federal Reserve’s strategy of essentially printing money may not be enough to avoid a deep and prolonged recession.
Unprecedented levels of private debt have been driven by persistently low interest rates and an enthusiasm for borrowing, matched only by a willingness to lend and an aversion to saving. Unfortunately there is limited evidence of gains in real productivity from these borrowings, compounding the monumental challenges of lost consumption and production resulting from COVID-19. There is also the issue of an apparent total lack of any coherent response to COVID-19 from the government, with well publicised ongoing conflicts between the federal and state departments!
In 2017 Ireland exported €33bn to the US, representing almost 30% of our total exports (Central Statistics Office). Diversifying from our dependency on the US will be critical to the viability of our SMEs and Ireland’s recovery.
Carol McGee
