The Republic is poised to rebound at a faster pace than most from the Covid-19 slump, even as the crisis may prompt countries to rethink how they secure goods and services, according the head of Citigroup’s European operations.
"Open economies feel awful in a crisis and feel much better in the recovery. Open economies like Ireland . . . do feel when the tide goes out it's pretty exposing but when the tide comes back in it comes all the way into shore," David Livingstone, chief executive of Citi Europe, Middle East and Africa, told The Irish Times in a video interview on Thursday.
The comments come as the Central Bank of Ireland has forecast that the Irish economy, measured by gross domestic product (GDP), will contract 9 per cent this year before rallying by 5.7 per cent in 2021 under a central scenario. This sees activity continuing to pick up from a low point in April as the economy continues to reopen.
Central Bank
A severe case, involving the recent lockdown having a more damaging effect than thought and not successfully containing the virus, would see the economy shrinking by 13.8 per cent, followed by a 4.9 per cent rebound in 2021, according to the Central Bank.
While Mr Livingstone said the fundamentals of globalisation – including digitisation, international harmonisation of rules and ability of people to travel internationally – remained “on a very positive trend”, he said Covid-19 had at least temporarily challenged how nations think about their supply chains.
Critical supplies
The onset of the crisis prompted individual nations to scramble for the supply of personal protective equipment, medical equipment and pharmaceuticals amid global shortages. This has prompted individual countries to look at their access to critical supplies needed to support their populations and economies.
“What’s the next thing? It’s power, it’s energy – all of these types of things,” he said. “It’s not deglobalisation, but redomestication of critical capability in services in economies to a level where they’re comfortable that they can operate and still participate in global networks.”
Citigroup's main European banking unit, Citibank Europe, is based in Dublin, where it employs about 2,500 people.
