Irish consumer sentiment fell back from a 15-year high, a survey showed on Tuesday, as respondents lowered expectations as to how much a robust economy recovery would improve their personal finances. The KBC Bank Ireland/ESRI Consumer Sentiment Index dropped to 105.8 from 108.6 in January, still far above the long term average of the survey and the second-highest reading in a decade as Ireland's economy grows faster than any other in Europe.
A weakening largely due to lower confidence in the outlook for household spending power mirrors the outcome of national elections last month when the outgoing coalition was rejected by voters yet to feel the impact of the economic upturn. "It seems to owe more to lower expectations as to how much the recovery will translate into stronger financial circumstances for the average Irish consumer," KBC chief economist Austin Hughes said.
"We would not regard the drop in sentiment as particularly surprising or alarming," he added. Hughes said the increased uncertainty over personal finances could have been prompted by both worries over global economic developments and the February 26 election. The election produced no clear outcome, making Ireland the latest euro zone state to face a prolonged political stalemate, potentially weighing on consumer and business confidence.
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