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Week Ahead (18 May)

Monday, 18 May – Ireland partly reopens ahead of Thursday’s Labour Force Survey

Phase one of Ireland’s economic recovery gets underway today which will see around 1,500 businesses return to work. On Thursday, the results of the Central Statistics Office (CSO) Q1 Labour Force Survey will be published. CSO figures show unemployment hit 28.2% in April – the highest rate in the history of the state and significantly worse than Department of Finance estimates which projected unemployment to peak at 22% in Q2. Youth unemployment was estimated at 52.8% in April – up from 12% in February – and in unlike in previous crises the emigration escape valve will be largely unavailable.

Meanwhile, government formation talks between Fianna Fáil, Fine Gael and the Green Party continue. The department of finance’s estimate of an increase in the deficit to €29 billion in a severe downside scenario factors in neither the investment required to fulfil Green proposals for the decarbonisation of the economy nor government bailouts for state entities such as the public transport company CIE – estimated by officials to be in excess of €2 billion.

W/C Monday, 18 May - UK economic data to be released

A tranche of new data to be released this week will show the continuing effect of the Covid-19 pandemic across a range of sectors in the UK. Services and manufacturing PMIs will be released on Friday, along with the latest consumer confidence survey. The UK house price index for March will be released on Wednesday.

Tuesday, 19 May - ECOFIN to discuss recovery fund and new AML provisions

The European Economic and Financial Affairs Committee meets on Tuesday when it is expected to discuss proposals for a recovery fund for Europe. Paolo Gentiloni, the EU Economy Commissioner, said on 26 April that such a fund could be worth up to €1.5 trillion and be ready for use by mid-September this year. While the idea of a recovery fund has been agreed in principle, the amount of funding to be made available, and the form of funding (grants v loans) is also the focus of intense debate. The Commission is expected to table its proposal on 27 May.

Wednesday, 20 May - Moody's to review Spain credit rating

Moody's will review Spain's credit rating on Wednesday, while the country's trade balance is due to be announced on the same day. Covid-19 has hit Spain especially hard and the Spanish government has responded to the outbreak by imposing one of the most severe lockdowns in Europe. Also on Wednesday, the government will ask the Spanish Parliament to extend the lockdown measures which expire on 24 May.

The Spanish government indicated on 1 May that it expected the economy to shrink by 9.2% this year, a larger fall than that experienced during the sovereign debt crisis of 2008-2013. On 20 April the Bank of Spain said that the economy could shrink by as much as 12.4% this year, with a rebound of 5.5% growth in 2021. GDP fell by 5.2% in Q1 2020 when compared to Q4 2019 – the steepest Q on Q decline since the Civil War, and by 4.1% on an annual basis.

Thursday, 21 May – May flash PMI data for France and Germany

Flash services and manufacturing PMIs for France and Germany will be released on Thursday.


Germany’s economy contracted by 2.2% in Q1 – its sharpest quarterly decline since Q1 2009 – and the German statistics office has forecast a 10% GDP decline in Q2. French GDP fell by a record 5.8% in Q1 and in the optimistic scenario the economy is forecast to contract by 9% this year.




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