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Ireland recorded the largest drop in household spending across the EU during the first Covid-19 wave, despite being one of only two countries in the bloc where income did not fall. Figures

published by Eurostat, the European Commission statistics agency, also found that Irish households recorded the highest increase in savings during the period. Fergal O’Brien, an economist at

the business lobby group Ibec, said this was likely to be due to a combination of the severity of Ireland’s restrictions limiting opportunities for spending, and the fact that incomes had

held up well in spite of the outbreak. Eurostat reported that spending by Irish households fell by 22 per cent between April and June compared with the same period in 2019. The next largest

decrease, 20 per cent year on year, was recorded in Spain, where spending declined by 20 per cent year on year, while the reduction across the EU was an average of 15 per cent. Advertisement

However, Ireland also recorded the largest increase in household savings, which rose by 18 per cent during the three months compared with the same period last year. It was one of only two

EU countries, the other being Denmark, where average gross disposable income did not fall. Spain recorded the second highest increase in household savings, which rose by 12 per cent. Mr

O’Brien told _The Times_: “The quarter two restrictions in Ireland were probably among the most conservative in Europe, but if you look globally at the corporations that have done really

well, tech and life sciences, they almost all have a presence in Ireland and their employees would have come through this pretty robustly. “The Irish economy is a bit of a standout

internationally. We probably have the smallest fall in GDP [gross domestic product] of any country in Europe, and our tax base has remained very resilient — there will be only a modest drop

this year compared to other countries.” In a report published last month, Ibec found that an “inability to spend” meant that households saved €9.8 billion in the first seven months of 2020.

“This saving behaviour has been turbocharged by Covid,” the group said at the time. “In the first seven months of 2020 households saved €9.8 billion. This is €5.5 billion more than in 2019

and €7.3 billion more than during the corresponding period in 2018.” Advertisement The enormous increase in savings comes despite the fact that hundreds of thousands of people have been put

out of work as a result of the pandemic. Mr O’Brien said that averages have become “meaningless” during the pandemic, as wages for workers in industries such as technology and

pharmaceuticals have been largely unaffected or may have even increased, at the same time as thousands in retail and hospitality have been devastated. “Any average at the moment is a very

dangerous observation of what’s actually going on in the economy,” he said. “There are some very strong sectors, and on the downside there are many who have suffered from the restrictions.

We have to use the revenue from those on the upside to support those on the downside.”