DAVY VIEW

Yesterday (July 7th), the European Commission (EC) published a new set of gloomy forecasts for euro area GDP to contract by 8.7% in 2020 (versus 7.7% previously), reflecting the damage from COVID-19. The EC expects Irish GDP to contract by 8.5% in 2020, a little more optimistic than our forecast in May for a 10.3% fall, which we expect to revise up. The EC noted multinational sectors had performed well but long and wide-ranging business restrictions had hurt activity in the retail, transport and tourism sectors.